Now that Helium is on Solana, what’s next? Let’s start with the big ones: All actions are now way faster than they were. Need to transfer tokens to someone? Should take about 30 seconds. Want to update info on your Hotspot? Same time. No more waiting 40 minutes or a few hours, or even a few days for actions you take to happen.
Now, having said that, there are a few things that have a delay in when you start to SEE them, one of which is staking rewards.
Before we get too far into that, let’s rewind a bit and start with what staking is, why having it is new and a big deal, and what the implications are. Let’s start with what staking is, and why a project might offer it. In many crypto projects you’ll stake, or lock up, tokens in exchange for the right to contribute to the blockchain in some way and be rewarded for that contribution. One example of contributing is running a blockchain validator. A validator makes sure all the transactions submitted to the blockchain are valid. If you use your validator nefariously (to cheat by validating bogus transactions), you stand to lose your stake. If your validators contributes to the network by helping validate transactions, you get paid in tokens.
When you “stake” HNT, you’re doing something different: You’re buying voting power. The more HNT you stake, and the longer you stake it for, the more voting power you get in return. That power is counted in “veHNT”, or Vote Escrowed HNT, and you can read about it here.
You don’t get anything other than voting power when you stake. If you’d like to earn tokens for your stake, you’ll need to take another step, which is to “delegate” your stake.
When you delegate your stake to a subDAO (currently IOT or MOBILE), you’ll earn tokens from that subDAO. The more you delegate, the more you earn, BUT it’s a little more complicated than that. Let’s start at the top, with looking at ALL available HNT.
If we think of HNT as a giant pie split up into slices, the first split comes when we carve out the HNT set aside for HST, or Helium Security Tokens. HST is what investors in the Helium Inc got when they put in their money, as recently as 2021 and as far back as 2018 or so. HST is super valuable, super rare, and not (as far as I know) for sale anywhere. It’s good to know it exists, but it’s not really worth focusing on.
The HST split of all available HNT looks about like this (roughly a third).
Let’s focus on the HNT we DO get access to, which is the largest slice of that pie at 68%. If we cut that out and make it it’s own pie, here’s how it would look if MOBILE and IOT were perfectly balanced.
In that scenario there are only 2 subDAOs, MOBILE and IOT. They each get exactly half of the pie, and each pays out 6% of the HNT it gets in the form of its native token to those who delegate their HNT to the subDAO. Now, that’s not all how it’ll shake out. In the early days following the transition, things went pretty lopsided in favor of IOT, and at one point the pie looked a little like this:
Because the subDAOs pay out just 6% of the HNT they receive based on how many delegated votes they get, that payout slice can get mighty fine.
Of course, it could go the other way, in MOBILE’s favor, which might look something like this:
However it shakes out, we’re in new territory here. As you can see, the more veHNT is delegated to a subDAO, the more powerful that subDAO gets. At the same time, the more veHNT goes to a subDAO that YOU are a part of, the lower your individual delegation rewards. The whole thing is slightly more complicated than the distribution in a box of Cheerios, although if you zoom out enough, it comes down to this:
The more valuable a network IS, the more value those who participate in it will receive. That’s it.
We haven’t scratched the surface beyond staking and into the rest of what Solana brings, like a new developer ecosystem, lightening the load on the Nova and Foundation blockchain teams so they can re-focus on building wireless networks, and the implications of the advantages from combining all that.
Just think, pretty soon there’ll be smart contracts revolving around sensor data picked up from Helium based weather stations that feed into giant insurance pools managing risk across the globe that are supported by DeFi products, and it’ll all happen on Solana. The ride is about to get wild!
Before you get discouraged, remember this: Those who learn fastest stand to see the most success, and right now there’s an awful lot of learning to do! As a human you have a native ability to learn, and the more you learn the better you get. Start new, don’t worry if you make mistakes at first, hang on, and enjoy the ride into the future we’re all creating together. Rock ‘n roll!