Helium Network to Stop IOT Mining Next Week, Moving Back to HNT
All network rewards will be paid in HNT as Helium ends its multi-token system. Helium Mobile network's SubDAO attempted to boycott the move
Helium Network partially passed proposal HIP-138 to move to a single token system, ending IOT emissions and shifting all rewards back to its most popular coin, HNT.
The vote failed on the MOBILE SubDAO, which could result in a situation where Helium Mobile network participants would continue to receive MOBILE tokens along with the restarted HNT earnings.
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The Helium Network uses a 3-token voting system, where HNT, IOT, and MOBILE holders have varying voting power based on each token's role in the ecosystem. HNT has the highest influence as it is the primary token and is used for governance. IOT represents the Helium Internet of Things (LoRaWAN) network participants, while MOBILE represents the Helium Mobile (5G) network infrastructure.
Helium - Network of Networks
In simple terms, Helium is a crowdsourced telecom network developer. Instead of centralized capital expenditure by telecom companies, the network is built by incentivizing individual 'miners' to install and maintain the transmitting hotspots.
Investors who subscribe to the HNT token issuance finance the incentive. Once the network is operating, network users pay in Data Credits, which are issued against burnt HNT.
After the success of the Helium LoRaWan network, the team manifested the vision to transform the protocol into a universal platform for building communication networks.
Tokenomics Matter
Helium introduced the multi-token structure in April 2023. At that time, the project had already started rolling out the second network—Helium Mobile 5G—in addition to the original Helium IOT LoRaWan.
Instead of HNT, Helium IOT and Mobile miners started to receive, accordingly, IOT and MOBILE tokens.
The idea was to give more autonomy to individual network government SubDAO and allow for the defining of individual rules and pricing for each network depending on its demand and other factors.
The fee for the network use (Data Credits) was left tied to HNT.
At the same time, the network migrated the accounting layer from its own blockchain to Solana. This improved the transaction costs but decreased further the utility of HNT. Miners could exchange IOT and MOBILE tokens directly with SOL, bypassing HNT.
HNT remained dependent solely on the network revenue, which, apparently, was not enough to consolidate the Helium ecosystem.
There was also an economic discrepancy between the Mobile and IOT networks. Mobile network was burning more Data Credits than IOT. In addition, the MOBILE token was priced higher on external exchanges than in the internal Helium treasury.
Meanwhile, the price of IOT on external exchanges strictly followed the internal Helium treasury floor price.
The Helium community approved proposal HIP-138 in November, citing that the multi-token system was overly complex and difficult for newcomers to understand. We think, however, that the proposal's main goal was to bring back value to HNT, largely at the expense of the Mobile network.
MOBILE - Meme Coin?
A major point of friction in the project governance appeared following the rejection of the proposal by the Mobile SubDAO.
A proposal typically needs to secure a majority vote across the combined token groups for it to pass. HNT holders largely supported the proposal, seeing it as a way to protect the ecosystem's overall value by curbing inflation and reducing dilution. IOT holders were divided, with many prioritizing their own network interests but generally aligning more with HNT holders due to shared concerns about tokenomics.
Some large MOBILE token holders, on the other hand, voted against HIP-138, which left the community puzzled.
Amir Haleem, the founder of Helium, CEO of Helium Mobile, and member of Helium Foundation, suggested that MOBILE will become useless and "threatened," according to the community, to turn it into a meme-coin.
Many community members called for a new vote or not to pass the proposal since it was not fully approved, and they criticized Helium Foundation's forced implementation.
Eventually, the Mobile SubDAO's vote was rescinded on the Helium Community call.
What's Next?
According to the HIP-138 timeline, the proposal should be implemented by January 15th.
As for IOT and MOBILE token holders, according to the team, there is no immediate pressure to switch to HNT. The tokens are backed by HNT in the networks treasuries, and their redemption rate will be determined by dividing the HNT treasury reserve by the total tokens in circulation.
Network participants will continue receiving rewards directly in HNT tokens following the same percentage structure defined in the current emissions schedule. Miners don't need to update their equipment — hotspots will continue operating as usual, and they will simply earn HNT instead of SubDAO tokens after next week.
Helium's announcement of the single-token system seems to have sent HNT's price tumbling from $10 in mid-December to today's $5.90, with a brief stop at $7 last week.
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