Still, we're in the network's early days and many questions remain. This post will focus on miner profitability for the 5G network, answer commonly asked questions such as:
- What will the rewards be for mining 5G?
- What will it take to mine 5G profitably?
- Is 5G mining worth an investment, or should I wait until the network is more establish?
To make the content easier to understand, we'll look at the rewards in various stages of the 5G rollout. This is part 1 of a series of posts and will focus on the first stage in the MOBILE rollout. Let's dig in.
Stage 1 - End of Mobile Genesis
As of August 17, 2022 just over 2500 5G hotspots have been deployed. How do the rewards work at this stage?
Take a look at the above diagram where the rewards are explained before the Proof of Coverage (PoC) and Data Credits (DC) incentives kick-in. In the future, the HNT emissions contract will distribute rewards to Hotspot Operators, Mappers, Oracles, and Service Providers.
But in this phase, the rewards are simple: 100M Mobile Tokens are being rewarded to Hotspot Operators each day. The source of these tokens is 10B of the 50B Mobile Pre-Mined tokens. The other 40B are for the Helium Foundation Treasury (25B) and Mobile Grant to Nova Labs (15B) (wallets linked).
That means on average, each 5G hotspot is earning 40,000 MOBILE tokens per day!
Take a look at the above diagram where the rewards are explained before the Proof of Coverage (PoC) and Data Credits (DC) incentives kick-in. In the future, the HNT emissions contract will distribute rewards to Hotspot Operators, Mappers, Oracles, and Service Providers.
But in this phase, the rewards are simple: 100M Mobile Tokens are being rewarded to Hotspot Operators each day. The source of these tokens is 10B of the 50B Mobile Pre-Mined tokens. The other 40B are for the Helium Foundation Treasury (25B) and Mobile Grant to Nova Labs (15B) (wallets linked).
That means on average, each 5G hotspot is earning 40,000 MOBILE tokens per day!
So how do you actually earn these tokens? Well, of course you need a hotspot and 5G radio set up (which is available for purchase from Helium Deploy). Currently, 5G mining is only available in the United States. Beyond your miner setup, you will also need to pass these 3 eligibility criteria:
- Stay registered in a Spectrum Access System (SAS)
- Meet minimum Quality of Service (QoS) of 100Mps downlink and 10Mps uplink
- Be located in a hex that’s been whitelisted for rewards
To register your device for SAS follow FreedomFi's guide (step 7). Each FreedomFi hotspot can be connected to up to seven 5G radios, which would 7x your rewards, as long as each one can pass the QoS bandwidth requirements.
Once you've passed these criteria, your rewards will be based on the number and type of small cell radios. Below are the earnings multiples for each type.
Small Cell Radio Rewards
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Each day, you'll get a share of the 100M MOBILE Tokens distributed based on your reward weight as a share of the network's total reward weights.
Rather than doing the math, you can use Helium Deploy's 5G Rewards Estimator tool. We will keep the tool up to date with every change and of course, with the eventual token price.
Note: currently no data is provided to differentiate between Outdoor Hotspots and High Power Outdoor, whose weights are 2.5x and 4.0x, so we assume a 3.0x average weighting for all outdoor.
In Dollar Terms
So, that's how much MOBILE token you can earn. Now, how much in dollar value will this actually be worth?
The final token price will be set by the market and made public when it becomes listed on an exchange, so it's anyone's guess. However, Helium brilliantly designed a floor price model for the token.
Here is the proposed formula for the Treasury Reserve DNT Market Making Curve.
The mechanism will enable a one-way exchange between MOBILE tokens and HNT, at the conversion rate above. At minimum, you can always get that much HNT per MOBILE token. The market value may trade above that (and we think it will), but any value below would be arbitraged away.
So how much will MOBILE tokens be worth?
Our guess: on day 1 it will start low, but rapidly rise into a top 100 crypto, making the early mining rewards extremely juicy. Imagine splitting the entire HNT emission between only a few thousand hotspots... This is what the early days of the Mobile Network may look like.
Our guess: on day 1 it will start low, but rapidly rise into a top 100 crypto, making the early mining rewards extremely juicy. Imagine splitting the entire HNT emission between only a few thousand hotspots... This is what the early days of the Mobile Network may look like.
How Will Rewards Work in the Next Phase?
In the next phase, Hotspots will also earn via Proof of Coverage. The exact PoC algorithm may match Helium's original IoT one, or vary, so stay tuned for our next blog post.
Unlike the IoT network, the hotspots will be witnessed by Mappers. Anyone with the correct device and application can be a mapper, and they will also earn a portion of rewards. Imagine a Pokémon Go app for finding 5G hotspots. That's coming to the Mobile Network in the next 2-3 months.
Finally and most importantly, the Data Credits used on the 5G network will determine how much HNT the treasury gets. You can think of it this way: the 5G network will be competing against the IoT network. Whoever gets more usage will get more HNT.
Remember, the Mobile Token floor price will be directly correlated to how much HNT the subDAO treasury gets. So the more network usage, the more HNT earned, the higher the MOBILE token price will go.
All these exiting dynamics will be uncovered soon.
Cheers,
Helium Deploy Team
Helium Deploy Team
N.B. The community and MOBILE subDAO are still constructing and tweaking the parameters and algorithms. If we got anything wrong or any major changes occur, we'll be quick to update this article. Please let us know in the comments below how we can improve.