How are Tokens Earned?
Hotspots earn HNT for building and securing network infrastructure and transferring device data.
The amount of HNT distributed to Hotspots depends on the type of “work” they perform based on the value to the network. This validation of network contribution is accomplished by a new work algorithm called Proof-of-Coverage (PoC).
To participate in PoC, Hotspots receive instructions (or 'challenges') from Validators to transmit payloads to any nearby Hotspots to witness and verify. These single-hop challenges are also known as 'beacons'. Hotspots without neighbors earn less as they can only mine HNT for data transfer and are unable to have their beacons verified. After the first year, distribution amounts adjust.
1. Challengee: 4.73%
Hotspots earn a share of HNT for participating in Proof-of-Coverage and validating their peer’s wireless coverage. The amount each Hotspot earns depends on how often it is directly involved in Proof-of-Coverage activity.
2. Witnesses: 18.92%
Hotspots that monitor and report Proof-of-Coverage activity (beacons) of other Hotspots receive a portion of HNT depending on how much activity they’ve witnessed, and the reward scaling of the Challengee.
3. Network Data Transfer: 37.5%
HNT is distributed to Hotspots that transferred data from devices on the network. The amount of HNT is allocated proportionally based on the amount of data a Hotspot transferred.