Helium’s HIP 51 vote is open and prepares us for Chapter 2
The Helium Network is associated with the Internet of Things (IoT). And it is doing a good job with it, but it’s also looking forward to a future with big changes. It’s a very ambitious future which depends entirely on the decisions of the Helium community. This time they have a very important HIP (Helium Improvement Proposal) to decide.
HIP 51 offers to introduce the Helium DAO. It will bring a fundamental change to the Helium platform future transforming it to a Network of Networks. It’s one of the most important HIPs ever and even Helium’s co-founder Amir Haleem wrote a blog about it.
What is HIP 51 about
So, as we said, Helium is synonymous with being an IoT network. It uses the LoRaWAN standard as a base which it builds on top with its own blockchain and unique hotspot verification process. The goal has always been the same – to make an open, affordable, secure and decentralized network which is owned and operated by the people. Helium will not be owned by corporations, but it welcomes enterprises to use it and participate in its development and expansion along with regular users and independent experts.
The formula is working and Helium is well on its way to reach 1 million deployed hotspots worldwide within the next few months. Haleem also points out that there are 5000 new cities added to the network every month. It also enjoys use from both regular people and Fortune 500 companies.
This model is attracting more and more interest, notes Haleem, not only from companies, but from other networks, too. He points out that last year Helium 5G launched with FreedomFi, followed by DISH, GigSky and others. Now, there’s a whole big project to create a nationwide cellular network in the USA.
It turns out that other projects also see the potential and like the concept. So, they want to join, too. It’s time to build Helium beyond IoT, says Haleem. And this is where HIP 51 comes in. It’s a change which will allow any network protocol to join Helium.
Grand View Research, Research & Markets, Semtech, Fior Markets and IndustryArc have compiled data for the massive potential that such a change brings to Helium. Currently, the IoT LPWAN segment is 1.2% of the total wireless services out there. If HIP 51 is accepted, this will expand Helium to a massive new world where it can work with other networks. For example, after HIP 51, the market opportunity for Helium could be to capitalize the 88.9% share of cellular networks, the 7.1% VPN and the 2.7% of Wi-Fi, along with the 1.2% of LPWAN. Now that’s quite the opportunity and it could make Helium even more important.
What changes would it bring to the Network
HIP 51 has been in discussion since January this year. It finally entered the voting phase which is happening right now. As the HIP notes, it “seeks to allow Helium and its token HNT to become a ‘Network of Networks’, opening the door for multiple network protocols and multiple tokens to exist in the ecosystem”.
This new system will allow any network to become part of Helium and use its infrastructure. What’s more, it will also allow any network to issue own tokens which will be backed by NHT. “HIP 51 aims to create an economy where the underlying HNT-Data Credit burn-and-mint equilibrium continues to power the Helium Flywheel, while Proof-of-Coverage rules and earnings are dictated by each corresponding subDAO”, says the description.
The proposal covers two core problems:
“Blockchain Scalability We propose that each DNP has oracles who operate software to calculate DNP specific items (eg: all the Proof-of-Coverage code that exists on the current LoRaWAN network to determine Hotspot rewards) and make DNT payments to DNP stakeholders (e.g., miners, stakers, etc). Oracles stake DNTs and are rewarded by a portion of DNT inflation.”
“DNP Specific Incentive Alignment We propose that each DNP operate as its own subDAO within the broader umbrella of the Helium Network. DNP subDAOs are able to issue DNTs to their stakeholders and DNT denominated governance controls DNP specific attributes.”
Long story short, each network protocol would have its own token and governance. Each network protocol receives HNT based on the size and utility of that network. Data Credits would still be required to use any network protocol, and just like today, would only be obtained by converting to and burning HNT, which decreases the overall supply of HNT, says Haleem.
Will it affect your HNT earnings
HIP 51 technically creates more opportunities for Hotspot owners. It will not affect your current and HNT holdings. Instead though the future earning will be a bit different.
Now Hotspot owners will be able to earn tokens from the other various networks they choose to support via Helium. “The more networks using Helium, the more network traffic and Data Credits used. This increases the overall value of the Helium Network”, says the proposal.
For example, if you get a Helium 5G hotspot, you will earn the $MOBILE token. Helium IoT hotspots will earn the $IOT tokens. All new tokens will be backed by HNT and users can convert them to HNT at any time via the app. So, there’s potential for even bigger earnings down the line. Existing HNT balances in your wallets will not be affected.
“Implementation of HIP51 would not impact device data transfer, Console users, or Router operators in any way. Devices across different networks would use Data Credits to send data over the Network and burning of HNT would continue to be required for Data Credits. New 5G users will now be able to leverage the Helium Network for their applications”, the proposal also notes.
How will it all happen
HIP 51 is actually just the start of the process. It will be implemented in three phases if the current vote passes. These phases also include the results from HIP 52 and HIP 53.
Here’s the preliminary schedule from HIP51’s original idea:
Phase I (Q2 2022) : As per HIP 53: Helium Mobile subDAO, MOBILE token is issued on the existing Helium blockchain. This will immediately allow any online 5G radio to mine MOBILE tokens.
Phase II (August 1, 2022) : On the third anniversary of the Helium Network, the IOT token is issued on the working Helium blockchain as per HIP 52: IoT subDAO,
Phase III (TBD) : After conducting a complete evaluation of all available Layer-1 blockchains to serve as the base layer of the Helium Network, a migration of the systems built until this point is actioned.
Exact dates will be announced after voting ends and there’s a clear view of what the people want for Helium’s future. As of May 30th, the vote is almost 98% in favor of HIP 51 and there’s a little more than a week left to vote. So, if you want to have your say about the future of Helium, now is the time to do so.
“When we set out to build the first decentralized wireless network, we knew the full realization of our vision would require a longer time horizon… While we’ve seen early success in IoT network growth, the real value metric is network usage overall. By accelerating the growth of new networks using the HNT model, usage from many applications will explode. We firmly believe in our vision and understand it will require a multi-decade effort with many core developers from many projects, in addition to our millions of community members.”, Haleem concludes.