Author: 0xResearch

Translation: Deep Tide TechFlow

Deep Tide Introduction:The Helium token surged 5.7 times from the bottom in two weeks. The apparent reasons were city collaborations and the passing of governance proposals, but on-chain data showed that revenue actually plummeted by 82%. This article analyzes the true causes of the short squeeze, helping investors distinguish between genuine demand and position squeezes, thereby avoiding buying at emotional highs.

Good morning everyone, happy Thursday!

Strong ETF capital flows from institutions, along with on-chain breakthroughs from players on Robinhood Chain, continue to paint a constructive picture of on-chain fundamentals, capital flows, and price trends.

Next, we will analyze the 5.7 times increase in HNT, distinguishing the true fundamental catalysts from the position dynamics that turned it into a short squeeze. The key question going forward is whether the destruction resulting from operator data offloading can accelerate enough to exceed the issuance, thus validating the valuation reset.

The demand for block space on Robinhood Chain has rebounded, with REV breaking through $4.6 million yesterday. This marks 11 consecutive days of increasing demand for the network, allowing this young L2 to reach 97% of total L2 profits and 42% of all on-chain network revenue. People can't help but annualize this figure and imagine a greater impact on HOOD stock and applications on the network.

Uniswap is one such winner, being the largest DEX on Robinhood Chain. Recent token incentive adjustments and groundbreaking deployments on Robinhood have led to a 33% increase in the token this week, leading the index during a week of sideways movement in major coins and a decline in the stock market. Index data confirms this, with the DEX sector rising 29% this week, showing a significant divergence from overall price trends. UNI has driven the outperformance of the sector.

The launch of Robinhood Chain represents a "bigger pie" scenario. It does not cannibalize trading volume from existing platforms but instead brings incremental demand to the entire on-chain economy. For Uniswap, this is reflected in the UNI destroyed through protocol fees, which is at a weekly high, with over 50% of the destruction coming from Robinhood Chain. Similarly, in the past 30 days, Robinhood Chain accounted for over 50% of Uniswap's total on-chain trading volume. In recent activity, the deployment volume on Robinhood has exceeded the total activity of all other chains, including the ETH mainnet.

Apart from the on-chain battlefield, ETFs seem to be finding a bottom in terms of assets under management, suggesting that major currencies may be forming higher timeframe lows. In August, BTC ETFs added $3.871 billion, and ETH ETFs added $1.911 billion. SOL and HYPE products also saw demand, but far below their predecessors.

Overall, funds flow, fundamentals, and price trends all support an optimistic outlook for the end of the year and beyond.

Helium Short Squeeze Dissection

HNT reached a multi-year low of $0.167 on August 15, with a market cap close to $31 million. Two weeks later, the token hit $0.96 intraday, a surge of 5.7 times from the bottom. As of this morning, its trading price is around $0.50, still up over 125% this week, with a market cap of approximately $95 million. This surge is worth dissecting, as the catalysts are real, and positioning amplified them, while on-chain records are more interesting than any narrative.

The news unfolds in four steps. Helium released HIP-150 on August 21, proposing to direct the increased issuance of the Mobile subDAO to deployers that carry paid data traffic. On August 28, Helium announced that Celina, Texas, had converted its public Wi-Fi to operator coverage on the network. That weekend, short sellers were crushed as the community voted 96.2% in favor of HIP-150 on August 31, and subsequently, Helium launched HeliumOS on Tuesday, a B2B platform that provides leasing coverage tools to operators and MVNOs instead of building their own.

The U.S. Census Bureau lists Celina as the fastest-growing U.S. city among those with more than 20,000 residents; the city layered Helium's operator offloading over existing public libraries, senior centers, and downtown stores' Wi-Fi, with mobile access via SIM-based Passpoint credentials. Helium's oracle indicated that on the announcement day, the entire mobile network transmitted 78,000 GB of data, with Celina accounting for approximately 0.1%.

When zooming out, the fundamentals diverge in two directions. Usage appears strong, with the rewarded operator's offloaded data showing a year-on-year increase of 2.4 times, from 1.26 PB in August 2025 to 3.06 PB last month, and daily traffic has maintained its trend during the upward period without inflection points. However, revenue tells a different story. In August, payers spent $263,000 on data credits for mobile traffic, which is an 82% decrease from the peak of $1.47 million in March.

As we reported in June, the $0.50/GB rate behind the peak was subsidized by Nova Labs, which burns its own HNT as a stopgap while operators negotiate location-based pricing, ranging from zero in low-value locations to over $0.50 at airports. HIP-143 adjusted the nominal fee rate to about $0.10/GB, a level acceptable for operators on a large scale, and oracle data shows that subsidies gradually exited in June. The March peak measured both Nova's balance sheet and operator demand. August's DC destruction is the first clean read on organic expenses for operators.

The removal of subsidies explains the urgency behind HIP-150. HIP-149, passed in July, set the deployer floor price at 50% of the new operator fee rate, or $0.05/GB. The proposal in August restored their economic incentives, raising the floor price to 80% ($0.08/GB), with multipliers as high as 5 times per hotspot, officially bringing location-based pricing that operators had negotiated off-chain on-chain, while Backstop minting redirected to the deployer data reward pool, blocking the leak where only 1.00 HNT reaches deployers for every 1.60 HNT minted by DAO. Nova Labs will provide its service provider rewards until July 2027, increasing the Mobile data bucket share of subDAO from 70% to 94%.

The valuation math remains harsh. The Data Credit spending in August annualized to about $3.1 million, corresponding to a market cap of $95 million, about 30 times payer revenue, and the supply side is unfavorable to holders.

The growth subsidy from HIP-149 minted about 5.96 million HNT monthly to the treasury managed by Nova in the first year. This raised the effective maximum supply from 206 million to 347 million. Thus, at the current rate, the operator's destruction volume is far below one-tenth of the monthly issuance.

The position structure filled the gap. The funding rate for HNT perpetual contracts fell below -1.2%, with short liquidations reaching $1.6 million over the weekend, while longs were under $200,000. On August 30, the transaction volume hit $248 million, surpassing the entire market cap.

The market describes a short squeeze that found a good story.

This short squeeze repriced HNT to a level that growth bets must fulfill.

Nova sold off its consumer business, ended subsidies, and now funds operator expansion with the HIP-149 treasury. Therefore, value accumulation can only rely on the growth of operator offload destruction, which must exceed the new issuance growth.

The management set their target in June: to reach an inflection point at current traffic of 7 to 10 times. By then, Helium's roaming share for cooperative operators will reach double digits, and pricing leverage will flip.

HIP-150 keeps deployers solvent before reaching that point. HeliumOS is the promised platform layer in Di Dio's roadmap. However, its initial customer, Affinity Ventures, owns Noble Mobile and recently acquired Helium Mobile.