Helium 5G vs. Helium IoT: how the Solana migration changed token economics and coverage incentives
For three years, Helium operated on a custom-built blockchain that struggled to keep up with the demands of hundreds of thousands of hotspot devices — slow block times, expensive transactions, and an infrastructure burden that diverted resources from the actual wireless network. The April 2023 migration to Solana was not just a technical housekeeping exercise. It fundamentally restructured how rewards flow to operators, how coverage is verified, and how value accrues to token holders. Then in January 2025, the network executed an even more consequential shift: retiring the IOT and MOBILE subnetwork tokens and consolidating all rewards into a single HNT token through HIP-138. These two changes — one infrastructural, one economic — reshaped the incentive landscape for everyone deploying Helium 5G or IoT hotspots, and the effects are still playing out across the network today.
The Solana migration: what actually moved
When Helium shut down its Layer-1 blockchain on April 18, 2023, it offloaded three critical functions onto Solana’s infrastructure and its own oracle system. Proof-of-Coverage verification moved from on-chain consensus to off-chain oracles that process beaconing and witnessing data in bulk, then submit only the results to Solana. Data transfer accounting similarly shifted to oracles, which track device data usage and calculate rewards without requiring per-packet on-chain records. Token management — HNT, IOT, MOBILE, and Data Credits — all became SPL tokens on Solana, inheriting the network’s sub-second transaction times and fractional-cent fees.
The practical impact on hotspot operators was immediate. Before the migration, every reward distribution required an on-chain transaction on Helium’s slow blockchain, costing meaningful amounts in Data Credits. After the migration, rewards accumulate off-chain in oracle-tracked accounts, and operators claim them on-demand with a single Solana transaction. The annual cost of claiming rewards daily dropped to approximately $0.07 per hotspot. Each new hotspot owner receives a small amount of SOL — roughly $0.035 worth — to cover 100 standard transactions, effectively eliminating onboarding friction.
The dual-token experiment: IOT and MOBILE
After migrating to Solana, Helium introduced a subnetwork token model through HIP-51, HIP-52, and HIP-53. IOT tokens rewarded LoRaWAN hotspot operators for IoT coverage and data transfer, while MOBILE tokens rewarded 5G and Wi-Fi hotspot operators for cellular coverage and data offloading. Both tokens were backed by HNT through a redemption mechanism: the Helium Foundation allocated HNT emissions to subnetwork treasuries, and token holders could swap IOT or MOBILE for HNT at a rate determined by treasury balances.
The model aimed to give each subnetwork autonomy over its governance and incentive structures. IoT hotspots earned IOT through Proof-of-Coverage challenges and data transfer rewards, with data priced at $0.00001 per 24-byte packet. Mobile hotspots earned MOBILE through coverage verification and data offloading, with data priced at $0.50 per GB. The tokens had different emission schedules, different reward allocation percentages, and different governance parameters — all designed to let each network optimize for its own growth dynamics.
In practice, the dual-token model created friction. Users had to manage three tokens (HNT, IOT, MOBILE), understand different redemption mechanisms, and navigate fragmented liquidity on decentralized exchanges. The swap rates between IOT/MOBILE and HNT fluctuated based on treasury inflows and outflows, creating uncertainty about the actual value of rewards. Governance participation splintered across subnetworks, reducing the effectiveness of community decision-making. By late 2024, the community had gathered enough evidence that consolidation was the right move.
How coverage incentives differ between 5G and IoT
The two subnetworks serve fundamentally different connectivity use cases, and their incentive structures reflect that divergence. IoT hotspots provide long-range, low-power LoRaWAN coverage for devices like GPS trackers, environmental sensors, smart meters, and agricultural monitors — applications that transmit tiny amounts of data over several miles. 5G hotspots provide cellular coverage for mobile phones, offloading data from traditional carriers like T-Mobile onto community-deployed CBRS radios and Wi-Fi access points.
To understand how the unified HNT model distributes rewards across these two very different networks, it helps to look at the key parameters side by side.
| Parameter | Helium IoT (LoRaWAN) | Helium 5G / Mobile |
|---|---|---|
| Wireless technology | LoRaWAN (sub-GHz radio) | CBRS 5G + Wi-Fi |
| Data pricing | $0.00001 per 24-byte packet | $0.50 per GB offloaded |
| Typical range per hotspot | 2–15 km depending on environment | 100–500 meters (CBRS), 30–100 meters (Wi-Fi) |
| Hardware cost | $100–$300 (LoRaWAN hotspot) | $500–$2,500 (CBRS radio + install) |
| Onboarding cost | $10 in Data Credits | $40 in Data Credits |
| Reward mechanism | PoC challenges + data transfer | PoC + data offload + discovery mapping |
| Primary users | IoT devices (sensors, trackers) | Mobile phone subscribers |
| Carrier partnership | None (standalone LoRaWAN) | T-Mobile (US), Movistar (Mexico) |
| Subscriber model | No direct subscribers | Helium Mobile plans ($0–$20/month) |
The contrast reveals why the two networks have very different growth trajectories. IoT requires minimal hardware investment and covers vast areas from a single device, making it accessible for hobbyists and small businesses. 5G demands significant upfront capital for CBRS radio equipment and professional installation, but generates substantially more data transfer revenue because mobile users consume gigabytes per month. After HIP-138, both networks earn HNT directly, but the Utility Score — a formula weighing Data Credit burns and coverage quality — determines how the HNT reward pool splits between them. When 5G data offloading generates more Data Credit burns than IoT data transfer, the 5G subnetwork receives a proportionally larger share of HNT rewards, creating a feedback loop that directs capital toward the network generating real usage.
What the unified token model changed for operators
The transition from IOT and MOBILE to HNT-only rewards, effective January 2025, eliminated several layers of complexity that had been throttling adoption. Operators no longer need to track subnetwork token prices, calculate swap rates, or time their redemptions to optimize value. Every hotspot — whether LoRaWAN or 5G — earns HNT directly, claimable through the same wallet interface and governed by the same token standard. This change has several concrete effects on how operators approach network deployment.
Understanding these effects requires looking at what shifted from the operator’s perspective after HIP-138 consolidated rewards.
- Simplified reward tracking — operators see a single HNT balance instead of managing IOT and MOBILE across different treasury redemption windows with fluctuating swap rates
- Direct value accrual — HNT is the only token with deep market liquidity on major centralized and decentralized exchanges, meaning operators can sell rewards immediately without a two-step swap process
- Utility Score-driven distribution — rewards now flow to whichever subnetwork generates more Data Credit burns, creating a market-based mechanism that prioritizes actual network usage over passive coverage
- Governance consolidation — veHNT stakers vote on all network proposals through a single governance layer, replacing the fragmented sub-DAO voting that previously diluted decision-making power
- Reduced treasury uncertainty — the old model required HNT emissions to flow into IOT and MOBILE treasuries before reaching operators, adding latency and rate volatility; the unified model pays HNT directly from epoch emissions
- Deflationary pressure concentration — all HNT burns (for Data Credits across both subnetworks) now reduce circulating supply of a single asset, concentrating the deflationary effect rather than splitting it across three tokens
Consolidating rewards into HNT does not come without trade-offs. Operators who previously earned MOBILE tokens benefited from a dedicated treasury that insulated their rewards from IoT network dynamics, and vice versa. Under the unified model, a surge in IoT data transfer could theoretically dilute the HNT rewards available to 5G operators, and the reverse is also true. The Utility Score formula is designed to mitigate this by weighting rewards toward the subnetwork driving more economic activity, but the mechanism is new and its long-term behavior under stress remains untested.
The burn-and-mint equilibrium after consolidation
Helium’s economic model rests on a burn-and-mint equilibrium that links network usage directly to token supply. Users who want to send data over the network — whether IoT packets or mobile data — must purchase Data Credits by burning HNT. Each Data Credit is pegged at $0.00001, meaning $1 always equals 100,000 DC regardless of HNT’s market price. When demand for data increases, more HNT is burned, reducing circulating supply and creating deflationary pressure. When demand falls, fewer HNT are burned, and the Net Emissions mechanism kicks in — re-minting burned HNT up to a cap of 1,643.84 HNT per epoch to ensure operators still receive rewards.
After the August 2025 halving, annual HNT emissions dropped to 7.5 million tokens, with daily emissions of approximately 20,548 HNT. The maximum supply remains capped at 223 million, and the halving schedule continues every two years — the next halving in August 2026 will reduce annual emissions to 3.75 million HNT. This declining emission schedule means the deflationary threshold becomes progressively easier to reach: as fewer new tokens enter circulation, even modest Data Credit burns can push the network into net deflation.
The unified token model amplifies this effect. Before HIP-138, Data Credit burns from IoT and 5G usage both burned HNT, but the resulting reward flows were split across IOT and MOBILE treasuries, adding complexity to the supply dynamics. Now, all burns reduce HNT supply and all rewards are paid in HNT, making the deflationary mechanic transparent and directly responsive to aggregate network demand across both subnetworks.
Network growth and real-world usage trends
The metrics from 2025 and 2026 paint a nuanced picture of whether the Solana migration and token consolidation achieved their goals. On the IoT side, hotspot growth has been modest — 34,500 new hotspots onboarded since the April 2023 migration, bringing the total to over 376,500. This is a significant slowdown from the pre-migration boom, when the network added over 342,000 hotspots in roughly three years. The deceleration reflects market saturation in dense urban areas and reduced speculative interest after the IOT token retirement.
The 5G side tells a different story. By Q1 2025, Helium Mobile had surpassed 160,000 account sign-ups, a 28.5% quarter-over-quarter increase, driven by aggressive pricing including a free plan with 3 GB of monthly data and a $20/month unlimited plan. The network had offloaded over 1,140 TB of cumulative carrier data — a 138.6% quarter-over-quarter increase — demonstrating that actual mobile data usage, not just coverage deployment, is growing. Monthly Data Credit volume surged from $67,500 in June 2024 to over $206,000 by December 2024, with the Mobile subnetwork consistently accounting for the largest share.
However, per-contributor rewards have declined sharply. Between October 2024 and March 2025, average rewards per Helium contributor dropped 68%, from approximately $49 to $15.50. This decline reflects both the token price compression (HNT’s circulating market cap fell 47.1% in Q1 2025 to $545.7 million) and the increasing number of participants splitting the reward pool. The competition from projects like XNET, which migrated to Solana in August 2024 and showed faster per-contributor reward growth, adds pressure on Helium to demonstrate that its unified model can sustain operator economics over the long term.
What this means for hotspot operators in 2026
The fundamental question for anyone considering deploying a Helium hotspot today is whether the unified HNT model creates better or worse economics than the old dual-token system. The answer depends on which subnetwork you participate in and how you value liquidity versus specialization.
For IoT hotspot operators, the consolidation is broadly positive. IOT tokens had limited exchange listings and thin liquidity, making it difficult to convert rewards to fiat without significant slippage. Earning HNT directly eliminates this friction, and the burn-and-mint equilibrium means IoT data transfer — however small per packet — contributes to HNT’s deflationary pressure, benefiting all holders. The trade-off is that IoT rewards now compete with 5G rewards in the same HNT pool, and if 5G data offloading continues to grow faster than IoT usage, IoT operators may see their share of HNT emissions shrink relative to the pre-HIP-138 era.
For 5G hotspot operators, the picture is more complex. MOBILE tokens, despite their price volatility, gave the 5G subnetwork a dedicated reward stream that was insulated from IoT dynamics. Under HNT-only rewards, 5G operators benefit from HNT’s superior liquidity and market depth, but their rewards are now subject to the Utility Score’s allocation logic, which may not always favor 5G depending on the relative Data Credit generation of both subnetworks. The cost of deploying a 5G hotspot — $500 to $2,500 for CBRS equipment plus installation — means operators need predictable return-on-investment horizons, and the unified model introduces more variables into that calculation.
The road ahead for Helium’s incentive design
The Solana migration solved the infrastructure problem. HIP-138 solved the token complexity problem. What remains unsolved is the fundamental tension between coverage bootstrapping and usage sustainability. Proof-of-Coverage rewards were designed to incentivize network deployment before real usage existed — paying operators to create coverage in anticipation of future demand. As the network matures, the economic model needs to shift from coverage-driven rewards to usage-driven rewards, where Data Credit burns from real data transfer become the primary revenue source for operators. The Utility Score mechanism introduced in HIP-141 is a step in this direction, but the transition will test whether the network can retain operators as PoC rewards decline and data transfer rewards become the dominant income stream.
The halving schedule adds urgency. With annual emissions dropping to 3.75 million HNT after August 2026, the total reward pool available to operators shrinks meaningfully. If network usage — and the corresponding Data Credit burns — does not grow fast enough to compensate, per-hotspot rewards will continue to decline regardless of token model improvements. The unified HNT model makes this dynamic more transparent: all operators can see the total HNT emission, the total Data Credit burn, and the resulting net supply change in a single metric, rather than parsing across multiple subnetwork treasories. Transparency is not a substitute for profitability, but it does give operators the information they need to make informed deployment decisions — which is more than the old model ever offered.