Is Helium Crypto a Good Investment: Best Research on HNT 

Published: April 19, 2024 | Last Updated: April 23, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

In this evaluation, I help you decide whether Helium crypto is a good investment. To do this I will break down my research across four dimensions: Team, Product, Tokeonomics, and Momentum

What is the Helium Network? 

The Helium Network started as a wireless network for sensors. It now also operates a cellular network for mobile phones. 

Let’s look at how Helium supports sensors first

Helium for IoT devices

Setting up wireless network infrastructure is expensive. It requires you to obtain a license for spectrum and erect those ugly cell phone towers across the country. 

cellphone tower

Helium’s founders Amir Haleem and Shawn Fanning (yes, the Napster guy) asked what if we got people to build the network?

Using a device that looks like a router anyone can set up a wireless hotspot in their house. On the one end, the hotspot connects to your home’s internet router. On the other, it emits a signal using the Helium LongFi protocol that anyone can use. Imagine this signal as being a long-range Bluetooth signal. Except it’s not powerful enough to carry voice or video. However, it is strong enough to carry basic data packets that an Internet of Things sensor might want to send. Stuff like location or environmental conditions. 

So now you have a network of wireless devices that are operated by participants and that anyone can use. For this reason, Helium is known as the People’s Network.

Why would anyone do this you ask? 

Enter HNT tokens as an incentive. 

Anyone who wants to use the network pays HNT to send data and anyone who is offering a hotspot is rewarded in HNT tokens depending on the hotspot’s usage.

What’s Helium Mobile

Let’s talk about mobile phone companies. 

There are two types. 

The first are Mobile Network Operators (MNOs). 

These are large telecom companies like AT&T, Verizon, and T-Mobile. They set up the physical infrastructure and then find customers. 

The second is Mobile Virtual Network Operators (MVNO)

MVNO are companies that lease network capacity from MNOs.

In the United States, these are companies such as  Metro PCS, Mint Mobile, and Boost Mobile.  

MVNOs are challenged because they are offering the same thing and trying to operate a business with very tight margins.

Helium Mobile is a mixture of the two. 

It’s an attempt at a multinetwork implementation that aims to use T-mobile sometimes and the Helium Network at other times. In the future, it may also use other decentralized wireless networks as they emerge.

So you can think of the Helium network as another MNO that is forming. On that’s building a 5G cellular network alongside the IoT network. 

As a subscriber to Helium Mobile you will have a SIM card and your phone will connect to a hotspot if you are near one alternatively you will use T-Mobile. The rate that Helium Mobile pays to the Helium network is much cheaper than the rate they pay to T-Mobile. 

This allows them to drop the cost for subscribers and incentivizes them to grow the network. 

Because the requirements and economics for the cellular network are very different from those of the IoT networks Helium’s mobile network has its own token called MOBILE. 

Helium Mobile launched in the summer of 2023. Subscriptions start as low as $20 and you get rewarded in MOBILE tokens for sharing location data which is useful for Helim to understand where more bandwidth is required.

Pretty cool huh? 

If you want to dive into the weeds I have an extensive deep dive into Helium here.

Helium blockchain

Helium used to have its own blockchain that used a Proof of coverage consensus mechanism. 

That will take too long to explain in this post but essentially it means you can use your Helium hotspot and its radio frequencies to mine HNT tokens. 

Since then Helium has migrated to Solana. 

Helium Token

The Helium Network Token (HNT) is the utility token and main medium of exchange for the Helium ecosystem.

The helium cryptocurrency token has a maximum supply of 223Mn and a circulating supply of 161Mn tokens. 

But there are three other tokens you need to know about

1. IOT token

The IOT token is used to reward wireless hotspot providers for their services. IOT tokens are redeemable for HNT and the exchange rate is based on an algorithm.

2. MOBILE token

Similarly, MOBILE tokens are used to reward cellular network hotspot providers. Here too MOBILE tokens are redeemable for HNT. 

3. Data credits

If you want to use the IOT or MOBILE networks you need to pay in Data Credits. Data credits are pegged to the USD but you can only buy them with HNT. 

Why so many tokens? 

For a few reasons

  1. The primary reason is that these networks are decentralized and that’s what the Helium community voted for through Helium Improvement Proposal (HIP)  51. 
  2. The reason they voted for multiple tokens is that each network has different characteristics
  3. The data credits are a good way to ensure a stable price that does not fluctuate based on speculation for the HNT token. 

All of the above make it super complex to have an intuitive sense of the value of HNT. 

Is Helium Crypto a Good Investment?

To answer this I scored Helium across four dimensions: Team, Product, Tokenomics, and Momentum

Team        

1. Are the founders legit with related experience?     ✔️    

Shawn Fanning started Napster. Nuff said. Amir Haleem has a background in computer gaming and a degree in AI. 

2. Have they built Web 3 projects before?    ✔️    

No

3. Did they do an exit?    ✔️    

Yes

4. Can you find legit profiles on LinkedIn?    ✔️    

Yes

5. Did they raise funds?    ✔️    

Investors include  Google Ventures, and Khosla Ventures which aren’t traditional blockchain investors. According to Tracxn, they have raised more than $8mn. 

6. How long have they been around?    ✔️    

Was founded in 2013

7. Public appearances through Interviews/podcasts    ✔️    

Yes you can easily find interviews and podcasts

Overall team score        100%

Product        

1. Is it easy to understand what they do?     ❌    

No, but if you read my article it is (scroll to the bottom).

2. What is it?    –    

A wireless network that crowdsources hotspots by offering tokens as an incentive

3. Is there a demand for their product?     ✔️    

Yes sensor operators need this kind of low-fi network and don’t have it

4. Is there a use case?    ✔️    

Yes as evidenced by its use

5. How big is the market?    ✔️    

It is big. Wireless network infra is worth $160Bn.

6. Is it being used?     ✔️    

Yes, there are 400K IoT hotspots and 15K Mobile around the world. These are being used by dozens of companies. Check the map here  and the list of companies using the network here.

helium hotspots
Helium hotspots. Source: explorer.helium.com

7. Github activity    ✔️

It’s busy

8. Has the product launched?    ✔️    

Yes you can set up a hotspot and you can purchase a Helium mobile subscription

9. Does it have a strategic moat?     ✔️    

First-mover advantage gives it network effects that will be hard to catch up with for a newcomer

10. Is it focused?    ✔️    

I’d say yes. It’s not trying to build a metaverse or add AI into the mix

11. Is the website easy to understand for non-crypto visitors?    ✔️    

Yeah though you do need to be technically minded. The podcasts make it easier to understand

12. Do they have a proof of concept?    ✔️    

Product is live

13. Is the UX good?     ✔️    

Yes, they paid a lot of attention to the app that accompanies the hotspots. Most of their original users were not even crypto native.

14. Is it already being done?     –    

Other decentralized wireless players are trying to copy the same thing. 

15. At what stage is the product?     –    

Live

16. How does it create value?     –    

It offers customers a cheaper product by crowdsourcing infrastructure from the community

17. How does the project generate revenue?    –    

Hotspot owners are paid in HNT. Helium Mobile is a for-profit company owned by Nova Labs and they make money through subscriptions. Nova Labs also operates a B2B business for sensors.

Overall product score        95%

Tokenomics        

1. Why is the coin valuable?    ✔️    

You need HNT to use the network. 

2. Did they do a pre-mine?    –    

Not for IOT but the Helium Foundation was allocated about 20% of MOBILE tokens for network operations

3. Is supply fixed or inflationary?    –    

HNT is fixed at 223Mn, MOBILE at 230Bn and IOT at 200Bn

4. Was it a fair launch?    –    

Yes for IOT, no for MOBILE

5. Circulating/total supply    ✔️    

HNT: 72%, IOT: 12%, MOBILE: 41%

6. Token release schedule    ✔️    

Gradual

7. Are there incentives to reduce or lock supply?    ✔️    

Yes, token holders can stake HNT for a yield and voting rights.

8. How many tokens    ❌    

Four: HNT, IOT, MOBILE, Data credits

9. How much upside is left: market cap vs industry size    ✔️    

$650Mn vs Billions

10. Is it listed on major exchanges?   –    

Yes it is listed on tier 1 exchanges

Overall tokenomics score        95%

Momentum        

1. Is it trending on social media?    ✔️    

Yes social dominance for HNT is picking up and is especially increased for MOBILE

Helium social dominance
HNT’s social dominance it picking up according to Lunarcrush

2. Is the market cap low compared to similar projects?    ✔️   

It is the largest decentralized wireless network but in terms of DePIN other cryptos such as Render ($3Bn market cap) and Filecoin ($3.3Bn) are much larger. 

3. What is the crypto market like?     ✔️    

Following a bullish trend

4. What is the sentiment for the sector this crypto focuses on  ✔️      

DePIN is a major narrative in the cryptocurrency market this cycle that could help boost Helium’s price

Overall momentum score        80%

Bottom line:

The Helium team is strong and its investors have gravitas.

The product is one of the few that is not a financial product and has tangible benefits: wireless coverage for IoT devices and a mobile cellular network. Compared to other DePIN projects the market capitalization is low but from a fundamentals perspective, it all depends on how much you think these networks will grow.

From a pumpamentals perspective, I see there is a community and it’s becoming louder.

I think the price of helium has a positive outlook with the potential to grow and offer a good return. HNT previously reached an all-time high of $54 which is 13 x from its current price. In the short term, the coin is going nowhere as the war in the Middle East escalates.

However, in the long term, we could see HNT hit that maximum value again or exceed it. 

Personally, I am not taking a position in HNT coin as I am invested in other digital assets. Scroll to related posts at the end for market research on other coins.

As usual, none of this is financial advice. Please make sure you do your own research. Hopefully, this article has helped you.

References

  1. On the brink with Castle Island: Amir Haleem (NOva Labs) on Helium, DEPIN, and DeWi.
  2. Official site: Helium.com
  3. https://hellohelium.com/
  4. token descriptions
  5. Stats explorer
  6. Docs

Up next

What Is Helium Mining? An absolute beginner’s guide

what is helium crypto

The Helium network is one of the coolest projects out there. In this deep dive I explain how Helium works.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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