Helium Token (HNT)

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Revision as of 07:53, 21 November 2022 by Grand Master Pepe (talk | contribs) (→‎Cons)

Standing up a wireless network for sensors and trackers that is powered by token-rewarded node operators.

Helium Token
TypePeer-to-peer wireless network
Consensus mechanismProof of Coverage
Total supply223,000,000
Websitehttps://www.helium.com/

Basics

  • Based in San Francisco
  • Started in / Announced on: 2013
  • From Proof of Work #79 (19-11-2019):
    The Helium Network went live in Austin, TX in August 2019 and has already grown to over 1250 Hotspots deployed across hundreds of cities in the United States."

"Helium is a mesh network where stakeholders purchase nodes under $500 to provide low bandwidth for Internet of Things devices. Tom Shaughnessy of Delphi Digital recently noted, “Since going live on August 1, 2019, over 2,130 nodes are live on the network covering 90% of U.S. states across 425+ cities. At Verizon’s IoT costs (600KB/year for $12), Helium is underpricing Verizon by 99.9988% ($0.00001 for 24 bytes or 0.024 KB). This type of price consolidation we should expect from the next generation of cell phone service providers, data storers, and truly any intermediary via a decentralized world wide web." 

History

  • Used to have its own blockchain but moved to Solana (23-9-2022)
  • Used to have 1 token, but moved to a multiple token system (12-6-2022).
  • From Messari (11-12-2020):

"Helium was founded in 2013 by Shawn Fanning, Amir Haleem, and Sean Carey, with a mission to make it easier to build connected devices. Helium believes that today's wireless connectivity options are wholely inadequate for the next generation of machines. To solve this they developed the Helium Hotspot, a combination of a physical blockchain node and wireless gateway that network participants can deploy to receive compensation in HNT, the native token. In order to receive rewards, Hotspots must submit proof of wireless coverage in a cryptographically verified location and time. Once the network is deployed, any sensor using the Helium LongFi wireless protocol can connect to the network which is intended for battery-powered devices sending small amounts of data over miles of range."

Audits & Exploits

Bugs/Exploits

  • An issue led to a Consensus Group stall and delayed block production times, rending the network unable to process any transfers, payments or mining rewards for 22 minutes (30-3-2021).

Governance

"Helium will be be working with the various network stakeholders and participants in the coming months to finalize the Helium network governance structure and mechanisms."

  • As of now there is a HIP process in place, with one important update getting approved by a community call.

DAO

Treasury

Token

Launch

"There was no token sale conducted for the HNT token. However, Helium Security Tokens (HST) have been sold to investors from 2014 to 2020, from which the Helium team raised a total of 55.00MM USD. Holders of HST are eligible to receive 34.00% of all mining rewards (Helium Inc. investors receive 21.50% of all mining rewards, with the rest distributed to the project team)."

Token allocation

"When the token launched, the supply was zero, with no premine. Approximate mining periods of 30 to 60 minutes unlock rewards which are distributed according to a changing growth plan.

Helium explains that at the start, node owners will accrue more HNT for building out network infrastructure, while later on, it will be more advantageous to transfer device data. This adjustment mechanism for token distribution is expected to last for around 20 years."

  1. "30% is allocated to Network Data Transfer
  2. 35% is allocated to Hotspot Infrastructure
  3. 35% is allocated to Helium, INC and Investors

Until the Data Credit mechanism is live, the 30% allocated to the Network Data Transfer will be re-allocated to the Hotspot Infrastructure. Data Credits (DCs) are used pay all transaction fees on the Helium Network. They are created by burning HNT to DCs. The reward distribution will evolve over time. Each year, the % allocated to each tranche will evolve as follows:

  1. The Network Data Transfer allocation will increase by 2.5%
  2. The Hotspot Infrastructure allocation will decrease by 1.5%
  3. The Helium, INC and Investors allocation will decrease by 1%"

"Significant token-economic changes have been approved by the community. HIP20 added a capped supply to HNT via Bitcoin-style halving, plus a novel "net emissions" recycling mechanic."

Utility

"Miners can earn Helium tokens (HNT) by proving they are creating wireless networks in Proof of Coverage Challenges."

"Hotspots are rewarded in HNT based on the quality of the coverage they provide and the amount of LongFi sensor data they transport for devices on the network. HNT is burned to create Data Credits, a non-fungible token used for all transaction fees on the network. Data Credits are required for things like sending sensor data and asserting Hotspot location."

There are five ways Hotspots earn tokens:

  1. Network Data Transfer: Hotspots transfer data packets from devices using the network and are rewarded proportionally for their overall share of data transferred.
  2. Proof-of-Coverage: Hotspots validate their peer's wireless coverage
  3. Witnesses: Hotspots monitor and report Proof-of-Coverage
  4. Consensus Group: Hotspots validate transactions and publish new blocks. The likelihood of participating in this consensus process is based on a reputation score that changes based on Proof-of-Coverage participation
  5. Challenges: Hotspots are chosen to encrypt messages over the Internet to a target group of Hotspots. These challenges are used by Proof-of-Coverage to validate wireless coverage."

Token Details

"The existing HNT token will continue to exist and serve as something of a “reserve currency” or “floor currency” for the expanding Helium ecosystem, Nova Labs CEO and co-founder Amir Haleem told Decrypt. Helium will first launch a new MOBILE crypto token this month, which will reward people who operate a 5G node and contribute coverage to Helium’s latest network. In August, the network plans to launch a new IOT token that node operators will earn for the original LoRaWAN network designed for Internet of Things (IoT) devices, like sensors and trackers.

Either of those tokens can be exchanged for HNT as holders please, a process that Haleem likened to the former ability for U.S. dollars to be swapped for gold. However, it’s a one-way process—Helium won’t provide a way to swap HNT back for MOBILE or IOT. Furthermore, as the new tokens launch, Helium will enable MOBILE and IOT token holders to govern each respective protocol via a new sub-DAO, or decentralized autonomous organization. "

"In addition to HNT, users pay transaction fees in a separate token called Data Credits, which are not exchangeable and tied to individual users themselves."

Coin Distribution

Technology

Implementations

Transaction Details

How it works

"Helium is a decentralized, open wireless network built on a new blockchain for the physical world. It relies on a novel type of work called Proof of Coverage, and a new consensus algorithm (based on HoneyBadger BFT). The Helium Network is used to route data for long range, lower power devices (often called "IoT" devices).

The Helium Network is built on Hotspots. The Helium Hotspot is a combination LongFi wireless router and Helium blockchain miner built and distributed by Helium, Inc. Hotspots create a long-range wireless network for routing packets to and from Helium LongFi-enabled devices and perform ongoing mining duties to secure the Helium Network. Hotspot operators are rewarded in Helium Token (HNT), a new cryptocurrency native to the Helium blockchain."

"Proof of Coverage is a type of Proof of Work (PoW) algorithm that uses radio waves to validate that Hotspots are providing legitimate wireless coverage. HNT tokens are consumed for the generation of Data Credits, which are used for data transmission and token transaction fees.

LongFi: Combines the Long Range Wide Area Network (LoRaWAN) wireless protocol with Helium blockchain so any LoRaWAN device can transfer data over the network.

A new Consensus Group (CG) consisting of 16 members is elected once per epoch. All active Helium Hotspots in the Helium network are eligible to be elected to a CG. A Hotspot is more likely to be elected if it performs well in the PoC Challenge.

  1. In each election, 4 new CG members will be elected. The other 12 members are from the previous CG election.
  2. Once elected, a Hotspot can participate in up to 4 consecutive CGs.
  3. Poorly performing CG members are likely to be removed from the CG before the 4 epoch limit is reached.

Following the election of a new CG, a Threshold Encryption Key (TPKE) is generated. The TPKE allows any Hotspot in the network to encrypt transactions to a master Public Key (PK) such that the CG must work together to decrypt it. The TPKE is used to make the network censorship-resistent, as it becomes difficult for members of the CG to arbitrarily ignore or delay certain transactions."

"Helium relies on a Proof-of-Coverage where Hotspots assert their location according to their GPS coordinates, and other Helium Hotspots routinely challenge in order to prove their location. Knowing where, when and how strongly a signal was received allows for verification of the transmitter location. Hotspots are constantly challenged by the Helium blockchain to prove their coverage, and they carry a score that floats dynamically between 0.0 and 1. This score represents the Network's confidence in their location as derived from those challenges, and thus the quality of their Helium LongFi wireless coverage

Consensus is reached using the Helium Consensus Protocol. It works by having the best proofs of coverage from the prior epoch elect members for the next one who then runs a distributed key generator to bootstrap their threshold encryption keys. Each member accepts transactions until they have a certain amount in their queue, then encrypts them with the threshold public key and gossips encrypted data around. Once members all share their proposed transactions, they are all threshold decrypted at which point they cannot be censored. The transactions are deduplicated, invalid ones removed, and they are combined into a new block. This block then has a threshold signature applied to it. Members trying to censor transactions will end up with a different block than honest nodes and thus their signature shares won’t be valid.

Helium provides coverage using LongFi, an open-source protocol in the Sub-GHz frequency band. Using LongFi any device can broadcast a message within the coverage area of the Helium network and have their message relayed to a web server for a fee."

Fees

Upgrades

  • HIP 51 passed in June 2022, enabling 5G, Cellular, and Wi-Fi support.
  • Data Credits went live (12-8-2020):

"With the latest update pushed live, Hotspot owners will earn HNT for transferring device data on The People’s Network and device owners pay for that connectivity using Data Credits."

  • Block halvings and a max supply cap got approved (19-11-2020):

"After several weeks of discussion and debate, the Helium Community approved Helium Improvement Proposal 20 (HIP 20) following the community call on November 18th, 2020."

Staking

"HIP25 moves blockchain consensus to a dedicated validator system that requires long-term staking of HNT."

Liquidity Mining

Scaling

"Based on the anticipated network traffic volume from millions of IoT devices constantly transferring data, the team decided to leverage state channels to allow packet transfer transactions to happen “off chain” and not processed by the main chain.

The participants in Helium State Channels are the Hotspot and the Console backend we call Router. Basically, Router acts as the air traffic controller for all data transferred on the network. Either forwarding data sent by devices and sensors on to their desired endpoints or pushing data down to these devices initiated from their owners usually in the form of commands or updates.

For IoT folks familiar with LoRa, think of Router as a combination of the functionality performed by the LoRa network, join, and application servers, as well as the network interface with the Helium Blockchain. More information about Router can be found here."

For more information on how tx work with these state channels, check out the link itself.

Different Implementations

Interoperability

Other Details

Oracle Method

From their docs (7-2020):

"HNT coverts to Data Credits at a rate pegged to $.00001 , and so the blockchain requires a canonical HNT/$USD price for this conversion. Beginning in June 2020, the Helium blockchain started using a system of decentralized price oracles to supply the $USD to HNT price used for on-chain for burn transactions. (This system is inspired by the Maker Foundation's Oracle usage.)

To find this price, nine oracles (this number may change in the future) periodically submit HNT/$USD prices. Once the blockchain has enough new price data, it will calculate a new HNT/$USD price that will remain valid until enough new, valid oracle inputs are submitted, triggering a new price revision.

The HNT Oracle price feeds are supplied by a group of nine (9) Oracles, composed of companies, organizations, and individuals. They are:

  1. Helium, Inc
  2. Decentralized Wireless Alliance (DEWI)
  3. Seven (7) Anonymous Individual Community Members

We’ve chosen to keep the names of the individual feed contributors anonymous as it’s essential to prevent any external attempts at extortion or blackmail."

Privacy Method

  • From their website (11-12-2020): "Total encryption from
Device to Cloud"

Compliance

Their Projects

The People's Network

  • From their blog (12-8-2020):

"This is only the first manifestation of the community-incentivized and owned approach, The People’s Network. While the network is for Internet of Things (IoT) sensors and devices sending small packets across long ranges today, we envision other wireless infrastructures leveraging the core, open source technologies, and applying the same model to other industries."

Roadmap

  • Can be found [Insert link here].
  • Helium’s core developers have proposed a migration from its own Helium network towards Solana, which will be voted on beginning September 12. In short, the developers think it will improve Helium’s speed, stability, and ability to serve more users. Initial responses were negative. It got voted in with 81% of the votes (23-9-2022).
  • Binance Research says most of the roadmap goals were on time, except for the Launch of Helium Hotspot pre-orders (24-9-2020):

"According to the Helium management team, the launch of Helium Hotspot pre-orders was delayed due to difficulty in hardware manufacturing."

It also mentions the following as the updated roadmap:

"2020 Q3

  1. Release of Miner Pro to allow any LoRaWAN gateway to participate in the Helium network.

2020 Q4

  1. Release of Google Cloud Platform and Microsoft Azure integration.
  2. Release of libp2p implementation improvements including switching to the Kademlia Distributed Hash Table.
  3. Release of updates to the Proof of Coverage algorithm, including level based staking for consensus.
  4. Integration with other wireless technologies including WiFi 6 and LTE/5G."

Usage

"To date, nearly 930k hotspots are live with coverage in 182 countries. Notably, the rate of new hotspots joining the network peaked in November 2021, and has fallen consistently since April 2022."

"The network now has more than 850,000 active nodes around the world, up from 640,000 in mid-March."

"Over 680,000 mining “hotspots” are online, with approximately 75,000 new hotspots being added monthly, according to Nova Labs Chief Operating Officer Frank Mong. But such rapid growth hasn’t always been a smooth ride for the network. Supply chain issues and extensive shipping delays have plagued the project, slowing the expansion of the network and angering would-be miners facing wait times of up to a year for their equipment."

  • From Our Network (19-6-2021):

"In the last 12 months, almost 60k hotspots have been deployed around the world. The rate of hotspot deployment has rapidly accelerated as new manufacturers have come online. Helium's peer-to-peer network now provides coverage in 80+ countries. Beyond LoRaWAN, work has started on expanding Helium to support 5G and LTE, which telcos could use as a low-cost backhaul for mobile phones."

Projects that use or built on it

  1. "Nestle ReadyRefresh: ReadyRefresh by Nestle is a customizable beverage delivery service, and was one of the first customers to test the Helium network for water tracking in Connecticut.
  2. Agulus: Agulus provides tools for automated agriculture. Agulus uses Helium’s network to automate water distribution based on wireless sensors connecting to the Helium Hotspots.
  3. Lime: Lime offers bike and scooter sharing services across the globe. Lime uses the Helium network to find lost bikes and scooters.
  4. Conserv: Conserv offers wireless monitoring for art collections in private and public museums; Conserv technology connects to the Helium network to provide information about artwork.
  5. Careband: Careband offers consumers wireless wristbands to monitor location and temperature of individuals working in hospital or office environments to help tracking contacts releted to COVID-19. Careband is using the Helium network for tracking the locations of wristbands.
  6. BCycle: BCycle offers bike sharing services in the USA. BCycle is using the Helium network for bike tracking."

Competition

  • From their blog (12-8-2020):

"Helium’s innovative approach of the network enables connectivity costs at a fraction of cellular and up to 95% less than other LoRaWAN connectivity providers charge. For example, one sensor connecting to The People’s Network pays $1.05 per year if it’s transmitting data every five minutes, nonstop, for a full year."

Pros and Cons

Pros

Cons

"Helium has been accused of using fraudulent endorsements from tech giants like Salesforce and mobility company Lime to give its network legitimacy, while also reportedly exaggerating its relationship with DISH Network, which it claimed would grant it access to its 5G spectrum.

As for Helium’s tokenomics, reporting from Forbes shows that the network has a checkered history of favoring its founders and insiders, while also using fake clients to increase their payout of tokens."

  • Had investment from bankrupt Alameda Research/FTX. This could mean fall-out risk. Also decided to stay on Solana, even though the ecosystem took huge hits.
  • Got outed (26-7-2022) as a money grab by a16z, while retail holds the bag and the protocol makes barely any revenue (total of $6.5k p/month):

"Members of the r/helium subreddit have been increasingly vocal about seeing poor Helium returns. On average, they spent $400-800 to buy a hotspot. They were expecting $100/month, enough to recoup their costs and enjoy passive income. Then their earnings dropped to only $20/mo. These folks maintain false hope of positive ROI. They still don’t realize their share of data-usage revenue isn’t actually $20/month; it’s $0.01/month. The other $19.99 is a temporary subsidy from investment in growing the network, and speculation on the value of the $HNT token. Even with a network of 500k hotspots, revenue is nonexistent.

Meanwhile, according to Helium network rules, $300M (30M $HNT) per year gets siphoned off by @novalabs_, the corporation behind Helium. This "revenue" on the books, which comes mainly from retail speculators, is presumably what justified such an aggressive investment by @a16z.

The complete lack of end-user demand for Helium should not have come as a surprise. A basic LoRaWAN market analysis would have revealed that this was a speculation bubble around a fake, overblown use case."

"Helium says that the most likely attack vector impacts node operators in the form of inbound ports of Hotspots."

Team, Funding, Partners

Team

"Haleem has an active eSports and game development background. Fanning, by contrast, is well known for developing Napster, the music sharing service which was one of the first mainstream peer-to-peer (P2P) internet services in the late 1990s.

Carey meanwhile held multiple development roles prior to Helium, which included advertising optimization firm Where, acquired by PayPal.

Helium’s team now consists of members which the company says have experience in “radio and hardware, manufacturing, distributed systems, peer-to-peer and blockchain technologies.”"

Funding

"Helium has raised equity funding from Khosla Ventures, FirstMark Capital, GV (formerly Google Ventures), HSB/MunichRe Ventures, Union Square Ventures, Multicoin Capital, and others."

Partners

  • Helium announced (7-2022) a partnership with T-Mobile to provide 5G service to Helium Mobile subscribers in places where the Helium network lacks coverage.

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