Ethereum’s transition to proof-of-stake may be around the corner, but news of another merge has got the cryptoverse talking. Helium, the popular hotspot network, is looking to move to a layer-1 blockchain and has fixed its sights on Solana. However, top brass from Algorand have intervened and are hoping to hijack the move. Tag along as we unpack the latest updates from what could be, in every respect, a battle for the largest chain migration ever.

First, what is Helium, and why does it want to migrate?

Helium is a Google-backed startup on a mission to disrupt the telecom industry. Currently, it provides wireless connectivity to smaller Internet of Things (IoT) devices while also working on a more extensive network of 5G hotspots.

Nodes on the network run devices known as Helium miners that act like wireless routers, providing internet connectivity to nearby devices. In short, Helium is touted as an alternative to hard-wired internet services.

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Helium is in a stage of massive growth. The network has grown to over 1 million hotspot devices in the last few months, and its fledging 5G project is also finding its feet. As such, project devs find it challenging to handle the data flow of the ever-expanding network, leading to inefficiency issues.

Keeping this in mind, Helium is looking to migrate to a layer-1 blockchain to achieve faster transactions, better stability, and higher interoperability. The network's developers considered several blockchains, such as Ethereum, Cosmos, Polkadot, Polygon, Avalanche, Aptos and Algorand.

However, they settled on Solana due to its large and diverse DeFi ecosystem and other physical work projects on its network, not to mention the network’s lower transaction costs, stability and scalability.

Helium first proposed the shift to Solana a couple of weeks ago. Since then, the price of SOL shot up more than 20 percent, rising from $31.61 on September 1 to $38.41 on September 13. However, Solana has retraced its steps back to $33.39 after last night's US CPI report showed higher than expected inflation in August and caused drops across the crypto market.

Algorand looks to hijack the move

As the news broke that Helium would be migrating to Solana, Algorand threw its hat into the ring, looking to hijack the move. The company’s top executives took to Twitter, urging Helium developers to reconsider the move to Solana, as they believe ALGO's network offers a better option. Algorand’s chief technology officer, John Woods, was the first to hit the microblogging website.

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"Helium needs a secure, robust and scalable chain. Algorand meets those requirements. We are ready to talk to the Helium team," he tweeted. Shortly after this, Algorand’s founder and CEO, Silvio Micali, tweeted in support of his CTO.

"Helium community, @HeliumFndn & @amirhaleem: @Algorand is ready to support @helium with our secure, scalable and TRULY DECENTRALIZED blockchain and help you with the migration,” he tweeted.

Algorand-focused VC and Helium investor Borderless Capital also jumped onto the bandwagon. In a series of 5 tweets, the VC firm appealed to Helium community members to stop the voting and reconsider proposals from other blockchains.

"We agree that @helium cannot maintain & operate its own L1 chain. But it is impossible for the community, third-party developers, staking providers, and users to understand the pros and cons of moving to a L1 like @solana without more rigorous analysis and transparency,” the company tweeted.

"We formally propose that the @HeliumFndn board evaluates proposals from other leading L1 blockchains first before submitting the #HIP70 proposal to the community vote,” it added.

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While most of the community members favour the move to Solana, a handful of network participants are against it. And not without reason. Of late, Solana has earned a reputation of being outage-prone, with five instances of downtime this year alone, the most recent of which lasted 4 hours and 10 minutes.

The blockchain has also been the subject of a recent exploit that saw $8 million worth of Solana being stolen. These factors go against Helium’s outlook of Solana as stable and scalable.

Algorand seems to be a viable option for Helium. The blockchain recently underwent an update that has boosted its performance to 6,000 transactions per second (TPS). Algorand is also carbon-negative and has experienced zero downtime since its launch.

Conclusion

Will Algorand’s appeal sway Ethereum devs? That only time will tell. Until then, the vote on HIP 70 remains active, with approximately 80 percent of users backing the move to Solana and the rest being against it.

First Published:Sept 14, 2022 3:47 PM IST