Over the last few years, the Helium Network has grown into the world’s largest network for connecting IoT devices. HIP 51 (aka Chapter 2) is the most significant update Helium has ever seen, transforming the once-singular platform into a “network of networks” that’s capable of housing more than just LoRaWAN. (If you’re not familiar with HIPs, read our article here.)
New tokens will allow subnetworks to grow independently of one another with their own tokenomics, but HNT will remain the underlying constant – in theory, creating value for all the networks under its umbrella.
What is HIP 51?
HIP 51: The Helium DAO
HIP 51 outlines a general framework for onboarding any new Decentralized Network Protocol (DNP), also known as a subDAO or subnetwork, to the Helium Network. Within the Helium DAO, which is fueled by HNT, each subDAO rewards hotspots with Decentralized Network Tokens (DNTs) in exchange for data transfer and Proof-of-Coverage. These subDAO tokens are backed by HNT and can be exchanged for HNT at any time. Data Credits are universal; they are generated by burning HNT and are usable across any DNP.
HIP 51 is often mentioned in conjunction with HIP 52 and HIP 53, so it’s important to understand how the three proposals are related:
HIP 52: The IoT SubDAO (LoRaWAN)
HIP 52 is an onboarding proposal for Helium’s IoT SubDAO. This proposal describes the initial details of the IoT subDAO, including tokenomics and governance mechanisms.
HIP 53: The Mobile SubDAO (5G)
HIP 53 is an onboarding proposal for Helium’s Mobile SubDAO. This proposal describes the initial details of the Mobile subDAO, including tokenomics and governance mechanisms.
Why is HIP 51 so important?
With HIP 51, Helium has set its sights far beyond IoT into higher-value networks like 5G and WiFi. In other words, Helium could become to the massive $1T+ Telecom industry what Bitcoin has become to the Financial industry – either as a fundamental application complement or as a disruptor. This is a big deal, because as you can see in the chart below, IoT represents just 1.2% of the total telecom market today. With HIP 51, Helium is preparing to take on the other 99%.
In this HIP 51 future, the HNT asset would be analogous to an index fund which houses tokens for a variety of network protocols. And the value of that HNT asset would not be determined by the IoT value alone, but by the value of the application of the entire network portfolio.
Not only does this mean potentially good news for the future value of HNT, but also points towards the stabilization of the coin’s value. Helium’s founding CEO Amir puts it quite well in saying:
When will this happen?
HIP 51 was passed on June 7, 2022. An implementation timeline will be announced as soon as it is ready. HIP 51 will be implemented in three phases:
Phase 1 | Q2 2022: The MOBILE token is scheduled to be issued on the Helium blockchain, and 5G hotspots will begin mining tokens.
Phase 2 | August 1, 2022: The IOT token is scheduled to be issued on the Helium blockchain on the third anniversary of the Helium Network. Existing LoRaWAN hotspots (including all Emrit CoolSpots™) will switch from mining HNT to IOT.
Phase 3 | Q3 2022 – Q3 2023: HIPs 51, 52, and 53 will be fully implemented and the Helium Network will migrate to an existing Layer-1 blockchain.
How will this affect current hotspots?
Existing LoRaWAN hotspots including all Emrit CoolSpots, will continue to mine HNT until Phase 2 of HIP 51 (August 1, 2022). After this date, LoRa hotspots will earn IOT, a token backed by HNT that is specific to the network protocol. This new token will be redeemable for HNT at any time. Emissions will restart with subDAO tokens, meaning LoRa hotspots can earn hundreds of IOT tokens per day. IOT is created on its own emissions and halvening schedule as defined by HIP 52, and the value of these tokens will be determined by network usage.
To be clear – IoT isn’t going anywhere. Helium is just opening itself up to host additional network protocols. HNT will soon be associated with much more than just IoT, increasing the token’s utility and therefore its implied value.
What happens to existing HNT?
Nothing will change about the HNT you currently hold, regardless of how it was acquired.
Will there be other wireless network protocols on Helium in the future?
HIP 51 provides a roadmap for separate IoT and cellular networks under the Helium umbrella. While it does not formally establish any other network protocols outside of these two, it creates the opportunity for other wireless networks such as WiFi and VPN to be onboarded. Proposals for additional network protocols can be submitted as a HIP via Helium’s HIP GitHub Repository or Discord channel.