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HIP20 is the present-day monetary policy for Helium and utilizes tried and true crypto economic mechanisms: capped supply and halvings (github). Thrown into the mix are the concepts of Burn & Mint equilibrium and Net Emissions. Understanding the network outlook boils down to answering one simple question: are the total number of HNT growing or shrinking? Despite the clear language of HIP20 it’s still not easy to form an intuition for this question. “$1M/month of network usage means a price of $20” is a line popularized by JMF, but what does it mean? How does one arrive at this conclusion? Are there other surprising conclusions?

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This post is really just an explanation of key concepts I wished were around when I tried to digest HIP20, starting with some of the common phrases thrown about when discussing Helium economics.

DC Burn is the core function of the network, and what we’re all here trying to do. Less understood is that there are two types of DC burn functions and the accounting is different for each.

  • Data transfer (not deflationary, up to a point)
  • Non-data transfer (deflationary)

Since the value of a data transfer DC burn is paid to the hotspot routing traffic, by definition it does not deflate the total supply of HNT until the total DC transfer in a 30 minute period (epoch) exceeds the allocation codified in HIP20. Today, this amount sits at 35% of total HNT emission per epoch, or approximately 1712 * 35% ~ 600 HNT. Due to nascent network utilization, true consumption is less than a 1/10th of a single HNT per epoch, so the unused portion is generously given to PoC participants.

Non-data transfer DC burns are from actions such as HNT transaction fees, onboarding fees and location assert fees. Since nobody is the recipient of these fees, there is no connection with Burn & Mint, and they are by definition purely deflationary.

Burn and Mint is where the use of the network is derived from burning the native token to redeem what amounts to non-transferable airline miles. The Multicoin Capital post will do the explanation more justice than I ever can. To say B&M is “kicking in” is really just a situation where demand-side HNT burn (constant cost) exceeds supply-side hotspot reward allocation (fluctuating), and thus the total supply of HNT is under deflationary pressure. Equilibrium is once again reached when the native token appreciates in price.

Put another way, when B&M is “kicking in”, hotspots won’t actually get paid the nominal rate for data transfer ($0.50 per 5G gb, $0.00001 per LoRa packet), instead earning a scaled portion. It always costs the same to use the network, but data routers only earn up to parity with cost. People assume this data transfer rate is fixed forever, but high network demand paired with volatile sentiment on $HNT can result in data transfer earnings less than expected. Today, it’s a far-off scenario but if the network really catches on it will surely happen and possibly catch people off guard.

Halvings. Like bitcoin, the monetary equation for Helium changes on a regular basis. Helium emission rate will halve every two years, but actually goes through changes on a yearly basis when the ratio of reward allocation between PoC, data transfer and founder reward all change. However, until DC burn from data usage becomes a greater quantity of usage, yearly changes are not especially relevant. I expect further changes to this reward schedule as more HIPs get implemented which factor in new forms of Proof of Coverage.

Net Emission is relevant many years from now and is framed as ‘a mechanism to ensure network participants always get paid’. The value of Net Emissions is locked at 34.42 HNT per epoch, and will not go down during halving cycles. Another way to think about Net Emission is it establishes a non-deflationary network utilization floor, or, a forever-window of 1:1 payment for data transfer participants.

There is a future date at which Net Emission, 34.42 HNT per epoch, makes up the lion’s share of all HNT available. Today, Net Emission consists of only 2% of the bucket per epoch (34.42 / 1712 HNT), in 5 years it will be 8%, but in 10 years it will be much higher at 65% and eventually consist of close to 100% of all available awards.

Crypto moves fast – how many headline projects from 2017 are around today? Its an interesting economic mechanism and critical for the long term network utility, but not likely a factor in Helium’s near term survival.

Painting a picture

I present below the first true visualization of HIP20. Using two simple numbers – price of $HNT and daily DC burn, you can use the chart to determine if the maximum supply of Helium is increasing, decreasing, or staying the same. Because the economic model changes on a yearly basis, so must this graph, so the present-day 2021 3 Year graph is next to the 20 year steady-state chart.

Make note of the location of lines representing DC B&M Equilibrium and N.E. Equilibrium. They actually switch places in the year 20 chart because halvings decimate HNT total emission, allowing Net Emissions to become the steady state non-deflationary floor. Year 3 also contains a section I called Slowed Inflation, which amounts to contributions to total supply from PoC. By year 20 this inflationary buffer has disappeared entirely and the inflationary floor shrinks to meet the line of net emission.

This brings us back to JMF’s million-dollar comment: “$1M DC burn per month (33k per day), guarantees support at $20”. You can see this statement visually now by tracing the $20HNT dashed line and seeing it intersect with the $33k per day DC burn price. This relationship is linear, meaning $2M/mo burn equates to $40 equilibrium, $10M/mo burn to $200 equilibrium and so on.

A less sexy but more accurate statement would be “In Helium’s steady state economic environment 17 years from now, DC burn in excess of $1M per month causes deflationary pressure on total supply when the token is priced below $20”.

(But that’s not as good of a tweet.)

I must point out this pertains to Data DC Burn only. The network burns on the order of $200k worth of onboarding fees daily, which is indeed deflationary. You can use the non-data DC burns alongside these charts, but the colors and boundaries will lose meaning.

The Helium economics are a simple but cleverly designed, utilizing well understood and accepted ideas within the crypto world along with a few new ones. The long term viability of the project requires the existence of a healthy stream of demand-side HNT burn. We are NGMI as long as HNT demand is driven by circular onboard and transaction fees. Stay tuned for a future article where I will discuss those exact prospects as it pertains to 5G.



Helium has 240k+ hotspots globally, growing at a rate of 50-70k monthly. It’s already the largest contiguous wireless network in the world, with several roaming deals under its belt and more in the pipeline.

The question remains: how much coverage does Helium really provide?

Spoiler alert: if your town has a Starbucks, theres a good chance you already have coverage.

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For the United States, I can answer this in a quick and dirty way using geolocation, zip codes and census data. This can be done easily with uszipcode and geopy python packages. First, I resolved the zip code of all online US hotspots based on their latitude / longitude (about 89k as of writing), then queried basic zip code statistics like area and population. It’s obviously not a perfect approach, but zip-basis gives a more meaningful picture on coverage than the city-basis already out there. Unpopulated or “weird” zip codes are excluded (such as military bases, large uninhabited land, territories, special government designations).

I should mention there are DeWi grants which will do similar things in a more robust way by using actual PoC receipts and more sophisticated mapping. I’m excited to see what they come up with.


Each zip code will be classified into the following buckets based on population divided by area. Using DoD definitions:

  • Urban zip codes have > 3000 people per square mile (97 million people live in this criteria)
  • Suburban zip codes have 1000-3000 people per square mile (71 million people)
  • Rural zip codes have < 1000 people per square mile (143 million people)

Its worth reiterating that I’m only counting online hotspots. The online hotspot rate fluctuates between 75-85% based on a variety of factors.

Zip code coverage

Above is a graph of total US zip codes containing at least 1 hotspot. Frankly, it’s an astonishing graph — Helium is spreading across the United states like a living organism. Below shows each demographic broken out over time. Last year, Helium had a presence in 40% of urban zip codes, today it’s 90%+. According to the rules of HIP17, when hotspot density grows too high the earnings go down. We are seeing this play out in real time as suburban zip codes are now the fastest growing demographic, with rural areas showing notable growth after the middle of 2021. By 2022 the rural zip codes will be the only remaining areas for large profit potential.

Class Total US zip codes Zips with hotspots %
Urban 3493 3149 90%
Suburban 3436 2500 73%
Rural 25958 4091 15%

(Note: Table dated October 2021, will be out of date very soon)

Node density

It’s also helpful to look at coverage according to density, defined as the number of hotspots divided by area of zip code. This is a good raw measure of people living in covered areas.

Hotspot density Number of zip codes Population of zip codes
> 0 hotspot/sq. mile 9740 229 million
> .5 hotspot/sq. mile (1:hex7) 4368 118 million
> 1 hotspot/sq. mile (2:hex7) 3178 87 million
> 2 hotspot/sq. mile (4:hex7) 2074 57 million
> 4 hotspot/sq. mile (1:hex8) 1158 33 million

(Note: Table dated October 2021, will be out of date very soon)

For the Helium crowd obsessed with hex placement, according to the area mapping table, a single hex7 is about 2 square miles, and a single hex8 is about .25 square miles. There are 118 million people live in areas with one hotspot per hex7, which is decent coverage with some redundancy. One hotspot per hex8 is terrific coverage and 8x more dense than 1:hex7, with about 10% of the United States living in these conditions. In reality, “true coverage” is better than these figures since a single well placed antenna can cover dozens of square miles.

The Helium Explorer shows hex8 cell size. One hotspot per hex8 would make the explorer cell map completely green, just like San Francisco, Los Angeles, Chicago or NYC.

Arguably, Helium is about 30% of the way to the end goal of 1 hotspot per square mile in the United States. By the time you read this, the data will already be out of date as the network marches towards 10x growth by 2022! Simply amazing.

Revised October 20th 2021 to fix some calculation and formatting errors.



A clickbait headline admittedly, yet the explosive growth of the Helium network is not unlike the spread of a powerful meme or a contagious condition.

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Cryptocurrency has always been a solitary endeavor: stake in a pool, operate GPUs, trade the market, or click-to-compound in a yield farm (reminiscent of swarmsim.)

Helium is different. Helium brings to crypto the #1 rule of the oldest asset class: location location location. As I recently pointed out, well placed nodes are 40x more productive than poorly placed nodes. This effect creates huge pressure for an enterprising individual to work his or her network to spread out geographically.

Viral MLM

Helium operators have all experienced it. You just finished an install, then as if by instinct, the host states: I can get more locations. What’s my cut? Congratulations: you are now a Helium superspreader. And believe me, the idea of Helium is contagious. It rings in your head like a bell. It’s like learning about bitcoin for the first time. The simple rules dictating Proof of Coverage produce amazing emergent social behavior — it’s an effect to behold.

These days, everybody knows the measure of a disease virality is the basic reproduction number (R0), defined as the average number of people infected by a contagious host. According to the NIH, COVID-19 R0 is between 2-3 by most estimates. What is the basic reproduction number of Helium? Let’s take a look.

Getting quantitative

Calchip and Bobcat have disclosed the average order being about 2.5 to 5 nodes per order. At the time of writing, there are 48k wallets and 146k hotspots, for an average of 3 hotspots per wallet. If we take the average of these numbers as the reproduction number, then we wind up with a number on par with COVID R0 estimates. So perhaps in a very crude way, we can answer “The Same” to the question posed in the title :)

The full distribution of hotspots & wallets sheds more light. Over half of all hotspots are owned by wallets containing less than 10 hotspots, who I dub the weekend warriors. The top 4.5% of wallets are the superspreaders, with between 10 and 70 hotspots to their name. (Yes, I know it’s possible for one person to create many wallets, but I argue the current tooling and hotspot onboarding experience makes this infeasible.) The heavy hitters, ie Hosting companies, own about 25% of all hotspots.

Class # of hotspots % of wallets % of hotspots
Weekend warriors 1 to 10 95% 55%
Superspreaders 11 to 70 4.5% 20%
Hosting companies 71+ 0.5% 25%

Helium Inc has confirmed 500K preorders across 50 manufacturers, and 2 million in production. Frank Mong, COO, quoted a chipset backorder as high as 3 million in a recent interview. For each order, that’s a cascade of retail users exposed to Helium and possibly crypto for the first time. Helium is like Alexa meets viral multi level marketing, except instead of selling lotion and vitamins, we’re building something obviously useful.

The idea of Helium just clicks and is sweeping through retail like wildfire. Watch out world.



I’m going to channel my inner Michael Saylor and soliloquise on the potential of Helium to dematerialize the telecom industry by removing hurdles of large scale network deployment (permits, man power, equipment costs) through utilizing the most over the top insane incentives ever devised in the crypto space. Like Amazon dematerialized retail and Google dematerialized paper maps, Helium will dematerialize telco infra by empowering individuals to bypass hurdles plaguing the industry. Helium empowers the individual like never before by offering unprecedented network build-out incentives and is rapidly constructing a powerful moat in and out of the crypto space.

Turn your view into money

Say goodbye to the relics of a bygone era (left) and hello to cell towers of tomorrow (right).

Traditional network build-out is a nasty proposition only stomached by entities granted monopoly rights over a scarce resource. Even in the smaller IoT domain, building coverage is an exercise in pain. To quote @wlazar
“[traditional IoT networks] take a few years to design and deploy before they could be fully operational… [we] had to negotiate access to limited pole mounting infrastructure…the sales-> network deployment cycle could take years.”

Helium is a lower energy state of network deployment – why coordinate with a municipality to erect eyesores and fight NIMBYs, when an equally productive location lies in a SFR a few blocks away, AND the owner does the installation for you, all while taking marching orders according to blockchain which is the most powerful coordination mechanism ever conceived by man. Helium turns NIMBYs to YIMBYs.

Helium represents a completely new way to monetize location and foot traffic because productive hotspots collectively represent thousands of permits not applied for, thousands of man-hours not billed for and millions of dollars of corporate debt not taken up, but with the same end result as the old way of doing things: ubiquitous and effective network coverage, but in 1/10th the time.

Phenomenally aligned incentives

The “Chinese Warehouse” model of crypto mining doesn’t work for Helium for the same reason you can’t fake the speed of light. Helium mining rewards are inexorably tied to providing verifiable and valuable wireless coverage across a geographic area. People are risking life and limb to climb roofs and towers in order to deploy the best wireless coverage possible for Helium. Let that sink in.

The Helium earnings S curve.

Above shows the distribution of June 2021 mining rewards according to the aforementioned guidelines. The elite top 5% of nodes outperformed the bottom half by a factor of 10x, and outperformed the bottom quarter by a factor of 40x (validators will affect this, but I don’t expect much). What other project offers a 10-40x premium on the same kilowatt hour of mining, just by setting up in the best deployment location?

In other crypto projects, the mining edge comes from access to cheap or subsidized electricity, or economies of scale from warehouses full of equipment purchased at-cost. With Helium, the difference between so-so and phenomenal performance comes from erecting a 10ft mast or striking a deal with your neighbor who has a better view. This incentive produces a never-before-seen bridge from the crypto domain to meatspace. As in real estate, for the first time ever in crypto, it’s about location location location.

Helium is unforkable

The open source crypto community is cutthroat. A small motivated team can fork your code and scoop the market from beneath your feet – just read about the ongoing food-DEX saga or a million other copy-forks just like it. However, in the same way you can’t download a car, you can’t fork thousands of man hours needed to place antennas in the Hollywood hills or high up on a mast. Any incumbent will need to fight just as hard to produce equipment and put that hardware in the hands of enthusiasts willing to hustle (or risk their life) to achieve 40x greater productivity than the rest of the nodes in town.

Hardware lead times are a law of nature, even outside of a pandemic. Helium is adding over a thousand node installations a day, each node representing a person climbing their roof or striking deals on new locations. Most installations are still done by individuals, but enterprise scale deployments are coming — soon. This momentum may be slower than a typical hash rate growth curve, but at the same time its unforkable and not subject to the changing moods of hash power profitability.

Helium is a platform

This year Helium is welcoming a new wireless spectrum outside of LoRa in the form of CBRS 5G in the United States. Freedom-Fi, the first Helium partner to dip their toe into this space, expects to ship hardware in September. Via Discord, they claim to have agreements in the works with 3 data-offload partners, two of which are American MNOs, one being tier-1 (think Verizon, AT&T, T-Mobile), and one MVNO aimed at the prepaid e-sim market.

Fundamentally, this new element of Helium does a few powerful things. To individuals and businesses, 5G CBRS offers new means of monetizing location and foot traffic. Have an apartment across the street from a popular park? Sell 5G data to the visitors. Own a nightclub? Monetize the social media addicted clientele.

Due to B&M economics, HNT must be burned for each 5G packet consumed, so the tokenomics are inevitably aligned to the mobile data consumption growth curve — which is expected to climb by a factor of 5x in the next 5 years. According to analysis from one of architects of the Helium economic model, if Helium can reach $5M Data credit burned per month (~10M GB consumed at $.50/gb), this raises the equilibrium price of HNT to $100. Approximately 3 Billion GB of mobile data transfer occurs every month in the US (link), so 10M GB/month is about .3% of all mobile data.

I know, I know, how many start up pitches begin with “If we can only capture 1% of this enormous market, we’ll all be rich…” But, being real, 5G usage isn’t even priced in yet and we are still realistically 6 months from seeing any real deployments. I personally think Helium could become the largest neutral host carrier in the next 1-2 years.

There you have it. My bull case for why Helium is in fact a different breed entirely from other crypto networks due to entirely novel incentive mechanism and ability to side skirt problems faced by the incumbent industry.




The Helium network is growing at breakneck speed, and for every new entrant that means another node in which to split a fixed block reward. However, the reward division is not clean cut, after all it depends on coverage provided and proximal node density. Everybody knows how much HNT reward they earn, but is the node performing well? Another related, and more tricky question to answer is where are rewards going after the network 10x’s in size? The rest of this article will lay out some numbers to answer these questions.


First, some ground rules: for a node to be eligible in this analysis it must meet two criteria. This is done to filter out new nodes and nodes with too much downtime. Any node in good working order, even lone wolves, won’t have a problem satisfying these conditions.

1. In a 1 month span, a node must have at least 25 reward events.
2. A node’s first and last reward in a month must be separated by at least 25 days.

The analysis consists of 500 randomly selected nodes, with HNT tabulated over 31 days. I’m not filtering for known gaming populations, consensus elections or any location in specific. To do all this I queried the Helium API and used a statistics package. If you want the python let me know.

One thing to keep in mind – on December 16th 2020, the Helium team officially pushed a major reward change in the form of HIP15 / HIP17 (see this great video to understand the concepts). This makes it difficult to draw parallels from 2020 since that reward structure operated under a different set of rules. Don’t forget the monetary policy shift of HIP20, which introduced a max supply cap and halving schedule! Come August, all of this analysis will be turned on its head as rewards reduce by 50% over night.

Growth and reward

As of March 2021, the Helium network is seeing tremendous growth. Helium team members fully expect from at least 100k, maybe 200k nodes by the end of 2021 [1]. Which is nuts.

This is a box plot of five 1-month snapshots in time. (Need a box plot reminder?)
A few points on the box plot graph:
  • The blue line connects the means (don’t confuse mean with median!)
  • The “box” contains two middle quartiles. The middle 50% of earners live in this box.
  • The Nov 2020 to Jan 2021 transition is interesting, because it shows the impact of HIP15/17.
  • HIP15/17 had a democratizing effect on earnings: the middle 50% of earners earned more because the box shifted upwards towards greater earnings. The end result of HIP15/17 is a big clump of people on the bottom end of the spectrum (10-50HNT/mo) actually earned more after the HIP15/17 drop.
  • Ultra high end earners saw a slight dip after HIP15/17 dropped.

Another way of showing this information is with a cumulative distribution plot.

A few takeaways:
  • If your node made ~120 HNT in February 2021, you did better than 50% of people.
  • If your node made ~550 HNT in February 2021, you did better than 90% of people.

January to February had modest growth in node count, adding about 3000 (20% overall inflation), and the 50th percentile monthly reward shrank by about 10% and the long tail rewards by about 15%. As the network continues its march to 100-200k nodes, we will see the CDF lines shift left as everybody makes less and less HNT. So far it looks like the low & high ends are more affected by node dilution.

Where from here?

Adopting the Jan to Feb trajectory as a simple rule (20% node inflation = 10% drop in 50th-% rewards, 15% drop in 90th=%), the rest of the year looks a little bit like this.

  • By 50,000, your 50th percentile node brings in 70 HNT monthly.
  • By 100,000, your 50th percentile node brings in 45 HNT monthly.

This is my 5 minute back of the envelope projection — no doubt there are better ways of modeling this. As the great 2021 gold rush plays out I may refresh it.


This post is a long winded way of saying it’s great to be an early adopter in a promising project :)

2021 will be an exciting year for Helium. The project has already captured numerous “world largest X”, and there is still a clear path to 10x’ing node coverage within 12 months. What will the headlines say in 2022? What fantastic new use cases will emerge for an ever present network, unconstrained by battery life and Big Telco costs? Temperature sensors, weather stations, rat traps.. those have great utility, but are frankly pretty boring. We’re just scratching the surface.