The Helium Inc Validators rules

First of all, you need to know that Validators on the Helium network have a cooldown of 250000 blocks which translates to about 6 months. This means that the 10000 HNT that are locked on the validator, will remained locked for another 6 months after the validator is unstaked. In this period, the HNT is locked and the Validator will earn no rewards. These are the Helium Inc rules for running a validator and there is no way around this.



    Why we are using a Liquidity Pool (LP)

Because we didn't like the idea of having the HNT locked for such a long period, we decided to implement a Liquidity Pool model. This allows our platform to offer shorter unstake times. Our platform offers a daily unstake period as long as the amount of HNT in the Liquidity Pool can cover the amount of HNT in the unstake queue.



    How HNT is added to the Liquidity Pool (LP)

There are several ways new HNT get into the LP and below you can see a full list of actions that adds HNT to the LP:

   - When new/existing users decide to stake more HNT, the HNT that they stake are added to the LP

   - When users have auto-stake enabled, the daily rewards are automatically added as stakes for the users and thus the rewards are added to the LP

   - When we unstake a Validator and the cooldown period of 6 months has passed, the unlocked 10000 HNT is moved to the LP



    How HNT is removed from the Liquidity Pool (LP)

There are two ways HNT is being removed from the LP:

   - When users decide to unstake, each night we run a script which calculates how much of the unstakes from the unstakes queue we can pay out. If there is enough liquidity in the pool, we pay out all unstakes and once the unstakes are payed out, the amount of HNT that was payed out is removed from the LP

   - When we start a new Validator, 10000 HNT is being locked on the validator and that amount of HNT is taken out from the LP.


    What happens when Liquidity Pool (LP) goes below 0 HNT

When the LP goes below 0 there are two solutions in order to get more HNT in the LP and resume the payment of unstakes:

    1 ) First we check how much HNT are in the unstake queue and we follow the unstake queue for a couple of days to see what the unstake trend is. If unstakes are lower than the average income of HNT in the pool, we will wait a period of time for the LP to get above 0. This process is a manual one and we are checking daily the unstake queue as well as the income of HNT into the LP. Based on the daily average HNT that comes into the Pool, it may be better to wait for period between 1 week and 5 months than to unstake a validator. There is no way for us to know an exact waiting time for this solution as it really depends on how much more HNT will come into the platform from new/existing users.


Note: Because it's hard to give an exact waiting time for this solution, we can tell you the average monthly HNT that comes into the LP and goes out of it. The average between january-may 2022  is as follows:

    - average per month IN: 60000 HNT

    - average per month OUT: 20000 HNT


   2) If the first solution cannot be applied this means that a large amount of HNT was added to the unstake queue which, based on our average HNT income, cannot be covered in a period of less than 6 months. In this case, we will need to unstake one or more validators depending on the amount of HNT unstaked. When this happens, we will need to wait for the 250000 blocks (6 months) in order for the HNT to be unlocked and returned to the LP.