Invest Alpha

HNT Helium

Introduction

Helium is a decentralized wireless network that enables IoT (Internet of Things) and 5G connectivity through a unique combination of blockchain technology and physical infrastructure provided by community members. The Helium network allows users to set up Hotspots, which act as nodes that provide wireless coverage while earning HNT, Helium’s native cryptocurrency.

Supported Blockchains

Solana

How it Works

The Helium dApp is built to facilitate decentralized wireless networks for IoT (Internet of Things) and 5G connectivity. It leverages blockchain technology and a unique Proof of Coverage (PoC) consensus mechanism to create a global, user-powered network of Hotspots that provide wireless access and earn rewards in Helium’s native token, HNT.

Key Components of the Helium dApp

  • Hotspots: Physical devices that offer wireless connectivity for IoT and 5G devices while earning rewards in HNT.
  • HNT Token: The native cryptocurrency of the Helium ecosystem, used for rewards and governance.
  • Validators: Users who stake HNT to verify transactions on the network and maintain network integrity.
  • Proof of Coverage (PoC): The consensus mechanism that ensures Hotspots are providing wireless coverage and verifying the location of devices.
  • The Helium Console: A management tool that allows users to oversee and monitor their Hotspots and the connected IoT devices.
  • Data Credits (DCs): Tokens used to pay for data transmission over the Helium network. DCs are non-exchangeable and are tied to the value of HNT.

Industry it is disrupting

Helium is disrupting the telecommunications and wireless connectivity industry, specifically focusing on two key areas:

IoT (Internet of Things): Helium is building a decentralized, low-power network for IoT devices, which traditionally relied on centralized telecommunications providers, cellular networks, or more limited solutions like Wi-Fi and Bluetooth.

5G Networks: By offering a decentralized alternative for 5G deployment, Helium aims to challenge traditional telcos and infrastructure providers by allowing users to deploy small 5G cells and earn rewards in HNT for providing coverage.

Traditional telecom companies like Verizon, AT&T, and Vodafone rely on building and maintaining expensive infrastructure (cell towers, fiber-optic cables, etc.). Helium’s decentralized approach offers a much lower-cost solution by enabling individuals and businesses to deploy Hotspots and 5G nodes, earning crypto rewards while providing network coverage.

Competitors

1. IoT Network Competitors

LoRaWAN (Long Range Wide Area Network): Similar to Helium, LoRaWAN provides low-power, long-range connectivity for IoT devices. However, LoRaWAN networks are typically centralized, often operated by a single entity or a consortium of companies. Helium’s decentralized approach, with a much larger global footprint, sets it apart.

Sigfox: A company offering low-power connectivity for IoT devices, but like LoRaWAN, it operates as a centralized network provider with limited global coverage compared to Helium’s community-driven network.

Amazon Sidewalk: Amazon’s low-bandwidth wireless network for smart devices. While Sidewalk covers smart home devices, it doesn’t have the same global, decentralized network approach as Helium.

2. 5G Network Competitors

Traditional Telcos (e.g., Verizon, AT&T, T-Mobile): These companies build and operate centralized 5G networks, investing heavily in infrastructure. Helium disrupts this model by enabling individuals and small businesses to deploy their own 5G Hotspots, reducing capital expenditure and allowing a broader, decentralized 5G network to grow.

Dish Network: A more recent entrant into the 5G space, Dish is also trying to build out its 5G infrastructure, but it operates within the traditional telecom model.

Rakuten Mobile: A Japanese company that offers a cloud-native 5G network with a focus on software-driven networks. Rakuten’s approach is more modern compared to traditional telcos, but it is still centralized, unlike Helium’s decentralized network.

Key Differentiators from Competitors

Decentralization: Helium allows anyone to participate in building and expanding the network, unlike centralized players like Verizon or LoRaWAN operators.

Lower Costs: Helium’s network infrastructure is community-driven, which significantly lowers the cost of network deployment compared to traditional telco infrastructure.

Incentivized Participation: Hotspot operators are rewarded in HNT for providing coverage, creating a direct incentive to grow the network. Traditional telecoms don’t offer similar rewards to individuals.

Global Coverage for IoT: Helium has a larger, decentralized global footprint for IoT devices compared to centralized competitors like Sigfox and Amazon Sidewalk.

Tokenomics

  • Total Supply

The total maximum supply of Helium’s HNT is 223 million. This cap ensures that no more than 223 million HNT will ever exist, with a controlled emission rate to balance supply and demand over time.

  • Current Circulating Supply

As of 2024, the current circulating supply of HNT is approximately 148 million. This number can fluctuate based on token burns (due to Data Credits conversion), staking activities, and halving events.

  • Emission Rate

Helium follows a deflationary model with a halving event every two years. Initially, 5 million HNT were emitted monthly. After the first halving in August 2021, the monthly emission rate dropped to 2.5 million HNT. The next halving is expected in August 2025, which will further reduce the emission rate to 1.25 million HNT monthly. This ensures a steady decrease in new token issuance over time.

  • Token Utility

HNT has multiple uses within the Helium ecosystem:

  1. Rewards: HNT is earned by Hotspot operators for providing wireless coverage and participating in Proof of Coverage.
  2. Data Credits (DCs): HNT can be burned to create Data Credits, which are non-tradable tokens used to pay for data transmission on the Helium network. The conversion of HNT to DCs follows a “burn-and-mint” equilibrium model, reducing the circulating supply of HNT.
  3. Staking: Validators stake HNT to secure the network and validate transactions, receiving rewards in return. Staking helps maintain network integrity.
  4. Governance: HNT holders can participate in governance, voting on key decisions like network upgrades, protocol changes, and Helium Improvement Proposals (HIPs).

Main Investors

Helium has attracted significant interest from both venture capital firms and individual investors, particularly in the tech and blockchain space. Some of the main investors include:

  • Multicoin Capital: A leading blockchain and crypto investment firm.
  • Union Square Ventures (USV): Known for early-stage investments in blockchain startups.
  • Andreessen Horowitz (a16z): A premier venture capital firm with a strong focus on blockchain technology.
  • GV (formerly Google Ventures): The investment arm of Alphabet, focusing on innovative technology companies.

Founders and History

Helium was founded in 2013 by Amir Haleem, Shawn Fanning (of Napster fame), and Sean Carey. Initially, the project focused on creating a decentralized wireless network, though the scope evolved over the years to include IoT and 5G applications.

  • Amir Haleem, the current CEO, comes from a background in gaming and blockchain technology.
  • The team launched the Helium mainnet in 2019, and by 2022, the network had grown exponentially with over 900,000 Hotspots globally.
  • In 2022, the Helium community voted to migrate from its own blockchain to Solana for enhanced scalability, culminating in a successful migration in early 2023.