What is a Reward Unit?

With the off-chain Proof of Coverage (PoC) transition, HeliumGeek started to display the 'Reward Units' for beacons and witnesses participating in PoC activities. But what exactly is a 'Reward Unit'?

As the Oracle processes the PoC events, it first validates the beacon and witnesses. A beacon may be witnessed by tens of different gateways, but only 14 of them are selected and the rest are ignored. Depending on the number of witnesses, both the beacon and the witnesses are assigned a 'Reward Unit' based on the formula given in HIP15. The gateways' transmit scale is not taken into account for this calculation.

In brief, a higher number of witnesses increases the Reward Unit for the beacon, but decreases the Reward Unit assigned per witness. For the full 14 witnesses, the beacon will receive 1.8926 Reward Units, while each witness will receive 0.222 Reward Units.

How are Reward Unit converted to IOT tokens?

Reward Units are a metric that measures how well an individual beacon or witness is performing among all the other gateways participating in the PoC activity. There is no fixed rate to convert a Reward Unit to an IOT token. At the end of each epoch (which, with the Solana transition, will be 24 hours), all the assigned Reward Units are summed to determine the conversion rate. At each epoch, a certain amount of tokens are distributed to the gateways.

Assuming there are no tokens allocated for data transmission (for the sake of simplicity), roughly 80% of the tokens are distributed for PoC activities. Among these tokens, 80% are distributed among the witnesses, while the remaining 20% are distributed for the beaconers.

For each witness, the number of witnessing Reward Units during the epoch will be summed after each Reward Unit is multiplied by the transmit scale of the beaconer. The gateway's total amount of scaled (by transmit scale) witnessing Reward Units (among the total number of witnessing Reward Units) will determine the amount assigned to the witness.

For the beaconers, the sum of the beaconing Reward Units will be added (again scaled by its transmit scale) to calculate their share in the IOT token pool for the epoch.