The core problem of DePIN is spoofing. How do we verify that a hotspot is physically present in New York providing coverage, rather than being a software simulation? Traditional consensus models (PoW/PoS) fail here. We must validate electromagnetic wave propagation.

Author’s Insight: "In DePIN, physics is the ultimate truth. While DeFi protocols fight over flash loans and MEV, Helium’s biggest enemy is the 'Virtual Hotspot' — a software phantom trying to steal rewards without ever transmitting a single photon. If you can't prove the signal exists in 3D space, the entire tokenomics collapses."

Defeated Attack Vectors:

• GPS Spoofing: Faking coordinates.

• Virtual Hotspots: Software-only emulation without hardware.

• Collusion Networks: Grouping hotspots in one room to mimic wide-area coverage.

Pre-Solana, every PoC challenge forced the blockchain to calculate Free-Space Path Loss (FSPL).

Author’s Insight: "The legacy Helium L1 was a 'heavy' blockchain. Imagine every bookkeeper in a bank also being forced to solve complex physics equations for every transaction. It worked for 10,000 nodes, but at 500,000, the chain was suffocating under the weight of RF receipts. Migration wasn't just an upgrade; it was a survival necessity."

Architect’s Insight: "The old approach was inefficient. Including complex physics calculations directly in the consensus layer led to massive bloat. It was like a bank trying to calculate the trajectory of every coin tossed into a vault."

Solana migration enabled Helium to move physics verification off-chain.

• The Process: Oracles verify RF signal integrity; Solana settles the rewards based on signed reports.

• Economic Security: Attacking requires controlling 2-of-3 oracles with high-value HNT stakes. Slashing risks make cheating mathematically non-profitable.

Author’s Insight: "By moving physics off-chain to Oracles, Helium finally decoupled 'computation' from 'settlement.' Solana acts as the ultimate judge, while the Oracles do the heavy lifting of calculating signal-to-noise ratios. This is the blueprint for any DePIN project: verify the physical world off-chain, but anchor the value on-chain."

Helium utilizes Uber’s H3 library to divide the world into hexagons.

• Resolution 8: Validates unique coverage.

• Density Scaling: Penalizes over-saturation in cities, incentivizing expansion into underserved rural areas.

Author’s Insight: "The H3 grid is the 'Real Estate' market of Helium. If you put 50 hotspots in one San Francisco apartment, you're not helping the network; you're just spamming. The density penalty is the protocol's way of telling miners: 'Go where the signal is needed, or your rewards will be decimated.'"

Oracles use digital elevation models (DEM) to estimate signal attenuation. If a signal "travels" through a mountain range without losing strength, the oracle identifies it as physically impossible and rejects the witness.

Author’s Insight: "This is where the 'gaming' ends. Oracles now check terrain data. If your signal claims to have traveled through a mountain range without losing 60dB of strength, the system flags you as a fraud. You can't cheat the Irregular Terrain Model (ITM)."

Wireless infrastructure networks face a fundamental economic tension: operators need stable revenue, while users (IoT companies) need predictable costs. If data costs $1$ HNT per GB, and HNT jumps from $\$1$ to $\$100$, the network becomes unusable for business.

Author’s Insight: "This is the 'Death Spiral' that kills 99% of utility tokens. You cannot build a global telecom business if your connectivity costs change every hour because of a Musk tweet. Helium solved this by decoupling the unit of value from the unit of utility."

Helium implements a model where network usage burns HNT to create Data Credits (DC), and mining mints new HNT.

• Data Credit Mechanics: 1 DC is pegged to $\$0.00001$ USD (fixed). To get DC, you must burn HNT.

• Net Emissions: The protocol allows for a "re-minting" of burned HNT up to a certain cap to ensure rewards for miners never hit zero.

Author’s Insight: "Look at the math: as the HNT price goes up, you burn less HNT to get the same amount of DC. This creates a fascinating balance. High price = low burn (supply stays steady). Low price = high burn (supply shrinks faster). It’s a self-correcting supply-demand regulator that would make central bankers jealous."

Post-Solana, Helium introduced subnetwork tokens to isolate incentives. IOT and MOBILE tokens are anchored to HNT through a treasury redemption mechanism.

Author’s Insight: "The HIP 51 update was a masterstroke. By creating sub-DAOs for IOT and MOBILE, Helium turned itself into a 'Layer 0' for DePIN. Today it's 5G and LoRaWAN; tomorrow it could be WiFi, VPNs, or even satellite data—all using the same HNT trust layer. The 333x over-collateralization of the treasury is the ultimate proof of its stability."

Helium's pricing is orders of magnitude cheaper than traditional legacy carriers (AT&T, Verizon).

Author’s Insight: "This is the 'Killer App' logic. 700x cheaper than AT&T for IoT data isn't just a discount—it's a total disruption. We aren't just building a decentralized network; we are starving the legacy telecom giants by offering a price point they physically cannot meet with their centralized overhead."

HIP 51 transformed Helium from a monolithic L1 into a modular Layer 0. In this architecture, HNT acts as the reserve currency and security layer, while independent Sub-DAOs (IOT, MOBILE) manage their own hardware standards, coverage rules, and internal incentives.

Author’s Insight: "This is the most underrated move in DePIN history. By implementing HIP 51, Helium effectively became an 'App-Chain' factory. It no longer matters if a new technology (like 5G or Satellite) is incompatible with LoRaWAN — you just spin up a new Sub-DAO with its own rules, but keep it anchored to the HNT treasury. It's the 'United States' model applied to wireless protocols."

Each Sub-DAO operates its own Reward Oracle and maintains its own token (IOT/MOBILE). However, they are all bound by a common economic gravity:

• Protocol Treasury: All sub-tokens are backed by HNT held in a programmatic treasury.

• Redemption Logic: Sub-tokens can only be burned to mint HNT (one-way bridge), ensuring HNT remains the ultimate value capture.

Author’s Insight: "The beauty here is the isolation of risk. If the MOBILE network faces a regulatory hurdle or a hardware bug, the IOT network remains physically and economically untouched. They share the same 'bank' (HNT), but they have different 'CEOs' (the Sub-DAOs)."

The most critical part of the modular architecture is how the protocol decides how much HNT each sub-network gets every day. This is determined by the Utility Score.

The current formula for a Sub-DAO's share of HNT emissions is:

Where:

• $V$ (Utility Score): The final score that determines the % of daily HNT rewards.

• $W$ (Device Weight): Total number of active hotspots (weighted by type).

• $S$ (Stake Weight): Total amount of HNT locked (veHNT) in support of that specific sub-DAO.

• $D$ (Data Usage): The actual amount of Data Credits (DC) burned by users on that network.

Author’s Insight: "The Utility Score is a masterclass in game theory. It forces sub-networks to compete. You can't just have 1 million fake hotspots ($W$); you also need real users burning data ($D$) and investors willing to lock their capital ($S$). It’s a three-way check-and-balance system that prevents any single sub-DAO from 'vampire-attacking' the HNT supply without providing real-world value."

By 2023, Helium had reached a scaling wall. With nearly 1 million hotspots globally, the legacy Helium L1 was spent. Every time a hotspot was added, or a location was asserted, the entire chain felt the friction.

Author’s Insight: "Let’s be real: Helium was a victim of its own success. Running a custom L1 for a million physical nodes is an engineering nightmare. We were spending more energy maintaining the blockchain than actually transmitting data. Moving to Solana wasn't just a choice; it was an emergency evacuation to a network that could actually handle the load."

The most revolutionary part of the migration was the use of State Compression and Compressed NFTs (cNFTs). In the old world, minting 1 million NFTs to represent each hotspot would have cost thousands of SOL. On Solana, it cost practically nothing.

The Mechanics: Instead of storing all the data for every hotspot in a separate account on-chain, Solana uses Concurrent Merkle Trees. Only the "Root Hash" (the fingerprint of the entire tree) is stored on-chain.

Author’s Insight: "This is the magic trick of the century. We turned 1 million physical devices into a single hash on Solana. When a hotspot owner wants to prove they own a device, the system just provides a 'Merkle Proof.' We reduced the cost of managing the network's identity by 99.9%. Without cNFTs, the fees for location assertions alone would have bankrupted the foundation."

Solana’s parallel execution (Sealevel) and low-latency blocks changed how Helium functions. Settlement of rewards, which used to take hours of processing, now happens with the speed of a high-frequency trading desk.

Author’s Insight: "In DePIN, latency is a killer. If a sensor sends a packet, the settlement needs to be instant. By offloading the 'heavy physics' to Oracles and using Solana as the 'High-Speed Judge,' Helium finally achieved the throughput required for industrial IoT. We went from a slow, clunky radio network to a streamlined, digital infrastructure machine."

About the Author

Artem Teplov is a Technical Protocol Architect and Infrastructure Analyst based in Los Angeles, CA. He specializes in high-fidelity Whitepaper development, Protocol Gap Analysis, and the architectural auditing of complex DeFi and DePIN ecosystems. Artem’s work focuses on the intersection of computational physics, tokenomic sustainability, and risk mitigation for next-generation decentralized networks.

Strategic Inquiries & Protocol Audits: If your project requires a rigorous technical deep-dive or a standard-setting Whitepaper, let’s connect.

• Farcaster: @artemteplov

• X (Twitter): @Teplov_AG

Author’s Note: If you find this technical analysis valuable, please consider supporting my work. Your engagement is the fuel that drives these deep-dives into the future of the machine economy. Thank you!

The core problem of DePIN is spoofing. How do we verify that a hotspot is physically present in New York providing coverage, rather than being a software simulation? Traditional consensus models (PoW/PoS) fail here. We must validate electromagnetic wave propagation.

Author’s Insight: "In DePIN, physics is the ultimate truth. While DeFi protocols fight over flash loans and MEV, Helium’s biggest enemy is the 'Virtual Hotspot' — a software phantom trying to steal rewards without ever transmitting a single photon. If you can't prove the signal exists in 3D space, the entire tokenomics collapses."

Defeated Attack Vectors:

• GPS Spoofing: Faking coordinates.

• Virtual Hotspots: Software-only emulation without hardware.

• Collusion Networks: Grouping hotspots in one room to mimic wide-area coverage.

Pre-Solana, every PoC challenge forced the blockchain to calculate Free-Space Path Loss (FSPL).

Author’s Insight: "The legacy Helium L1 was a 'heavy' blockchain. Imagine every bookkeeper in a bank also being forced to solve complex physics equations for every transaction. It worked for 10,000 nodes, but at 500,000, the chain was suffocating under the weight of RF receipts. Migration wasn't just an upgrade; it was a survival necessity."

Architect’s Insight: "The old approach was inefficient. Including complex physics calculations directly in the consensus layer led to massive bloat. It was like a bank trying to calculate the trajectory of every coin tossed into a vault."

Solana migration enabled Helium to move physics verification off-chain.

• The Process: Oracles verify RF signal integrity; Solana settles the rewards based on signed reports.

• Economic Security: Attacking requires controlling 2-of-3 oracles with high-value HNT stakes. Slashing risks make cheating mathematically non-profitable.

Author’s Insight: "By moving physics off-chain to Oracles, Helium finally decoupled 'computation' from 'settlement.' Solana acts as the ultimate judge, while the Oracles do the heavy lifting of calculating signal-to-noise ratios. This is the blueprint for any DePIN project: verify the physical world off-chain, but anchor the value on-chain."

Helium utilizes Uber’s H3 library to divide the world into hexagons.

• Resolution 8: Validates unique coverage.

• Density Scaling: Penalizes over-saturation in cities, incentivizing expansion into underserved rural areas.

Author’s Insight: "The H3 grid is the 'Real Estate' market of Helium. If you put 50 hotspots in one San Francisco apartment, you're not helping the network; you're just spamming. The density penalty is the protocol's way of telling miners: 'Go where the signal is needed, or your rewards will be decimated.'"

Oracles use digital elevation models (DEM) to estimate signal attenuation. If a signal "travels" through a mountain range without losing strength, the oracle identifies it as physically impossible and rejects the witness.

Author’s Insight: "This is where the 'gaming' ends. Oracles now check terrain data. If your signal claims to have traveled through a mountain range without losing 60dB of strength, the system flags you as a fraud. You can't cheat the Irregular Terrain Model (ITM)."

Wireless infrastructure networks face a fundamental economic tension: operators need stable revenue, while users (IoT companies) need predictable costs. If data costs $1$ HNT per GB, and HNT jumps from $\$1$ to $\$100$, the network becomes unusable for business.

Author’s Insight: "This is the 'Death Spiral' that kills 99% of utility tokens. You cannot build a global telecom business if your connectivity costs change every hour because of a Musk tweet. Helium solved this by decoupling the unit of value from the unit of utility."

Helium implements a model where network usage burns HNT to create Data Credits (DC), and mining mints new HNT.

• Data Credit Mechanics: 1 DC is pegged to $\$0.00001$ USD (fixed). To get DC, you must burn HNT.

• Net Emissions: The protocol allows for a "re-minting" of burned HNT up to a certain cap to ensure rewards for miners never hit zero.

Author’s Insight: "Look at the math: as the HNT price goes up, you burn less HNT to get the same amount of DC. This creates a fascinating balance. High price = low burn (supply stays steady). Low price = high burn (supply shrinks faster). It’s a self-correcting supply-demand regulator that would make central bankers jealous."

Post-Solana, Helium introduced subnetwork tokens to isolate incentives. IOT and MOBILE tokens are anchored to HNT through a treasury redemption mechanism.

Author’s Insight: "The HIP 51 update was a masterstroke. By creating sub-DAOs for IOT and MOBILE, Helium turned itself into a 'Layer 0' for DePIN. Today it's 5G and LoRaWAN; tomorrow it could be WiFi, VPNs, or even satellite data—all using the same HNT trust layer. The 333x over-collateralization of the treasury is the ultimate proof of its stability."

Helium's pricing is orders of magnitude cheaper than traditional legacy carriers (AT&T, Verizon).

Author’s Insight: "This is the 'Killer App' logic. 700x cheaper than AT&T for IoT data isn't just a discount—it's a total disruption. We aren't just building a decentralized network; we are starving the legacy telecom giants by offering a price point they physically cannot meet with their centralized overhead."

HIP 51 transformed Helium from a monolithic L1 into a modular Layer 0. In this architecture, HNT acts as the reserve currency and security layer, while independent Sub-DAOs (IOT, MOBILE) manage their own hardware standards, coverage rules, and internal incentives.

Author’s Insight: "This is the most underrated move in DePIN history. By implementing HIP 51, Helium effectively became an 'App-Chain' factory. It no longer matters if a new technology (like 5G or Satellite) is incompatible with LoRaWAN — you just spin up a new Sub-DAO with its own rules, but keep it anchored to the HNT treasury. It's the 'United States' model applied to wireless protocols."

Each Sub-DAO operates its own Reward Oracle and maintains its own token (IOT/MOBILE). However, they are all bound by a common economic gravity:

• Protocol Treasury: All sub-tokens are backed by HNT held in a programmatic treasury.

• Redemption Logic: Sub-tokens can only be burned to mint HNT (one-way bridge), ensuring HNT remains the ultimate value capture.

Author’s Insight: "The beauty here is the isolation of risk. If the MOBILE network faces a regulatory hurdle or a hardware bug, the IOT network remains physically and economically untouched. They share the same 'bank' (HNT), but they have different 'CEOs' (the Sub-DAOs)."

The most critical part of the modular architecture is how the protocol decides how much HNT each sub-network gets every day. This is determined by the Utility Score.

The current formula for a Sub-DAO's share of HNT emissions is:

Where:

• $V$ (Utility Score): The final score that determines the % of daily HNT rewards.

• $W$ (Device Weight): Total number of active hotspots (weighted by type).

• $S$ (Stake Weight): Total amount of HNT locked (veHNT) in support of that specific sub-DAO.

• $D$ (Data Usage): The actual amount of Data Credits (DC) burned by users on that network.

Author’s Insight: "The Utility Score is a masterclass in game theory. It forces sub-networks to compete. You can't just have 1 million fake hotspots ($W$); you also need real users burning data ($D$) and investors willing to lock their capital ($S$). It’s a three-way check-and-balance system that prevents any single sub-DAO from 'vampire-attacking' the HNT supply without providing real-world value."

By 2023, Helium had reached a scaling wall. With nearly 1 million hotspots globally, the legacy Helium L1 was spent. Every time a hotspot was added, or a location was asserted, the entire chain felt the friction.

Author’s Insight: "Let’s be real: Helium was a victim of its own success. Running a custom L1 for a million physical nodes is an engineering nightmare. We were spending more energy maintaining the blockchain than actually transmitting data. Moving to Solana wasn't just a choice; it was an emergency evacuation to a network that could actually handle the load."

The most revolutionary part of the migration was the use of State Compression and Compressed NFTs (cNFTs). In the old world, minting 1 million NFTs to represent each hotspot would have cost thousands of SOL. On Solana, it cost practically nothing.

The Mechanics: Instead of storing all the data for every hotspot in a separate account on-chain, Solana uses Concurrent Merkle Trees. Only the "Root Hash" (the fingerprint of the entire tree) is stored on-chain.

Author’s Insight: "This is the magic trick of the century. We turned 1 million physical devices into a single hash on Solana. When a hotspot owner wants to prove they own a device, the system just provides a 'Merkle Proof.' We reduced the cost of managing the network's identity by 99.9%. Without cNFTs, the fees for location assertions alone would have bankrupted the foundation."

Solana’s parallel execution (Sealevel) and low-latency blocks changed how Helium functions. Settlement of rewards, which used to take hours of processing, now happens with the speed of a high-frequency trading desk.

Author’s Insight: "In DePIN, latency is a killer. If a sensor sends a packet, the settlement needs to be instant. By offloading the 'heavy physics' to Oracles and using Solana as the 'High-Speed Judge,' Helium finally achieved the throughput required for industrial IoT. We went from a slow, clunky radio network to a streamlined, digital infrastructure machine."

About the Author

Artem Teplov is a Technical Protocol Architect and Infrastructure Analyst based in Los Angeles, CA. He specializes in high-fidelity Whitepaper development, Protocol Gap Analysis, and the architectural auditing of complex DeFi and DePIN ecosystems. Artem’s work focuses on the intersection of computational physics, tokenomic sustainability, and risk mitigation for next-generation decentralized networks.

Strategic Inquiries & Protocol Audits: If your project requires a rigorous technical deep-dive or a standard-setting Whitepaper, let’s connect.

• Farcaster: @artemteplov

• X (Twitter): @Teplov_AG

Author’s Note: If you find this technical analysis valuable, please consider supporting my work. Your engagement is the fuel that drives these deep-dives into the future of the machine economy. Thank you!