Helium (HNT) Staking: A Step-by-Step Guide
Crypto staking is one of several ways investors can earn passive income from cryptocurrencies. Investors can lock up their assets for a certain period and earn rewards on centralized exchanges (CEXs) like OKX and decentralized exchanges (DEXs) like Uniswap.
Helium (HNT) is one of the popular coins that offer staking opportunities to investors. After mining some HNT, investors can put their hard-earned HNT to use via Helium staking and earn a decent profit over time. This guide breaks down the Helium staking process to help investors understand how it works.
What Is Helium (HNT)?
The Helium network is a blockchain-based network that allows communication between multiple internet of things (IoT) devices via network nodes called Hotspots in the Helium ecosystem. Helium was created in 2013 as “The People’s Network” to prepare an efficient and functional IoT for the future and address the issues and inadequate solutions in the IoT space.
On Helium, the Hotspots function using LoRaWAN to provide public network coverage. LoRaWAN is a media access control layer protocol with a cloud component to which platforms like Helium can connect. These devices connect and exchange data over the network to provide users with low-cost and long-range connectivity.
In other words, the Helium network is a decentralized wireless network that allows multiple devices to connect to the internet wirelessly through nodes anywhere in the world. With this mechanism, Helium provides a more reliable and cost-effective connectivity alternative to traditional cellular networks.
Helium is an open-source network, so anyone can connect and contribute to the network’s development. In addition, Helium is one of the biggest LoRaWAN networks today, with over 100,000 hotspots acting as nodes on the network.
How Does Helium Work?
Helium aims to decentralize the global network of IoT devices and provide a cheaper and more reliable connectivity option to the Helium community. However, to become a community member, an investor must hold the platform’s utility coin called HNT.
HNT holders (also called node operators) can connect to the Helium network via its hotspots using multiple nodes. These users also manage the nodes and relay data from one node to another on the network without needing a central server.
Since HNT is a proof of stake (POS) coin, the Helium network incentivizes node operators to contribute to the network's functionality via a unique staking mechanism.
Like other common staking mechanisms, when a node stakes HNT on Helium, it locks up its coins for a fixed period. However, the operator forfeits the staked coins if the node goes offline or stops relaying data.
That means nodes must stay online and keep the network running smoothly to enjoy the financial incentives that come with Helium staking.
Helium network participants are divided into three, each having a unique role crucial to the network’s functionality: Challenger, Transmitter, and Witness. The staking rewards distributed also depend on the node’s role in the Hotspot network. At the same time, the network uses a consensus mechanism called Proof of Coverage to distribute rewards to HNT holders and node operators.
Helium Staking 101: How to Earn HNT
Staking HNT on exchanges can be a lucrative investment. However, HNT staking is not limited to these platforms alone. The coin can be staked directly on the Helium Staking website. Follow the steps below to stake HNT.
Create a Helium Wallet
A Helium wallet is required to store HNT on the platform.
- Download the Helium Wallet App from the official accounts on Google Play Store or Apple App Store and click “Get Started.”
- Proceed to the next screen and tap the “Create New Wallet” button.
- The app will provide a 24-word recovery phrase. Write down the words in a real-life document and click “I have written these down” to proceed.
- Verify the seed phrases as requested and create a wallet name.
- Set a six-digit PIN code to complete the process.
Buy HNT
Purchase the HNT to be staked on the Helium network from an exchange like OKX. To do this, generate a wallet address or QR code from the Wallet App using the “Request” button on the home screen and transfer HNT from an exchange account.
Note that the minimum amount of HNT needed for full staking is 10,000 HNT coins. However, investors can also opt for Helium partial staking with any amount of HNT coins.
Create Staking Account
Visit the Helium Staking website and sign up for a free account using a valid email and password. Getting started is easy, and the registration process is quick.
Transfer HNT to Staking Wallet
After creating an account on the Helium staking website, navigate to the wallet page and generate the unique wallet address. Then transfer the HNT coins from the Helium Wallet App to the staking wallet using the “Send” button on the Wallet App home screen.
Enter the staking account address, HNT amount, and an optional note in the spaces provided in the dialogue box and click “Pay.” The transferred coins will appear in the new staking account in a few minutes.
Alternatively, an investor may send a small amount of HNT to the wallet for testing before transferring all the staking funds.
Stake HNT
After the transferred funds have been credited into the staking wallet, lock the HNT coins in the staking pool using the “Stake” button. Enter the HNT amount to be staked or slide to select the amount using the slide button.
Click “Verify transaction” and wait for the network to complete the staking process. This may take up to 30 minutes to be approved.
The staking rewards are automatically added to the wallet balance, so investors can view from time to time to see their profits, auto-stake the rewards in the pool, or unstake their HNT staked using the “Cash Out” feature.
Fees
Apart from the 10,000 HNT coins needed for staking on the Helium network, the process attracts a monthly fixed fee of $150 per validator for full validator nodes. On the other hand, partial staking fees are 4% of staking rewards + Validators operational costs charged by the validator nodes that the partial investor is connected to.
Final Thoughts
Staking Helium coins (HNT) can give miners and investors a promising opportunity to profit from their idle coins. In this HNT staking guide, we considered the process of staking HNT for a streamlined and hassle-free experience. We also explored the concept of partial and full staking, fees, and rewards.
However, investors should take note of the associated fees and their staking power to determine if HNT staking is right for them.
FAQs
Can Helium Be Staked?
Yes. Helium is a proof-of-stake network and can be staked directly on the Helium staking platform or certain popular cryptocurrency exchanges. The staking process is quite simple and seamless. However, the staking rewards accrued to investors is directly proportional to the token quantity staked and the staking period duration.
How Much Do You Make Staking Helium?
Investors can earn variable annual percentage yields (APYs) between 4% to 10% when they stake Helium. However, the profit depends on the amount staked and the staking period.
How Much Helium Do You Need To Stake?
Helium requires 10,000 HNT coins for full node staking. In contrast, partial staking has no minimum. However, it attracts more fees.
Is Helium on Solana?
The Helium network is a decentralized wireless network for IoT. However, the Helium community members recently voted to move the network to the Solana blockchain.
