Updated: Aug 23, 2021
I'll start out by citing the resource I'll be referencing directly from Helium docs:
This explainer is already just about as good as it gets, but I'll attempt to add some additional motivating context & summarize here.
What does "Relayed" mean?
Essentially when a hotspot is relayed it means that it is having a harder time communicating with its peers (other hotspots). As a result, it will have a lower success rate in completing various aspects of PoC (Proof of Coverage). This communication among and between hotspots is what helps PoC validate & authenticate hotspot placement & reward the most valuable installations accordingly. If you are unable to successfully complete PoC activity, you will earn less rewards as a result.
Before we attempt to resolve the issue, first it helps to understand the context of how PoC activity functions and how it relates to Relayed status.
Beaconing : The Backbone of PoC
What is beaconing?
Beaconing is the central component that all aspects of rewarded PoC activity revolve around. A beacon is initiated when a challenger hotspot issues a challenge to another hotspot on the network (the transmitter or challengee) to prove that it is providing coverage where it says it is & demonstrate the quality of its coverage. Each hotspot should construct & send a challenge to another random hotspot about once every 300 blocks -- or about 5 hours.
When a hotspot is challenged, it will beacon [or transmit] a signal to the surrounding area; any surrounding hotspots that are able to receive the transmission (witness the beacon) send receipts that they witnessed said beacon back to the challenger hotspot. So there are 3 components to the hotspots involvement in the PoC process:
Challenger - Initiates the challenge to Challengee/Transmitter to beacon.
Challengee (Transmitter) - Transmits the beacon when challenged.
Witnesses - Receives the beacon transmission and reports back to the challenger.
How does beaconing relate to the Relayed status?
This is where the Helium docs we mentioned at the start of the post are especially useful. Now that we have the backing context of PoC and beaconing covered, if you reference the above docs link, you'll find visual illustrations on how this affects each of the 3 components of PoC activity (Challenger, Challengee/Transmitter, Witnesses).
How to fix it
To resolve the Relay status and ensure your hotspot has the best possible connection to communicate with other hotspots and earn as much as possible, there is one main thing you'll need to accomplish: Port Forwarding (Port 44158). To do this you will need to access the admin settings on the router your hotspot is connected to the internet with.
This can be a bit tricky, because every ISP (Internet Service Provider) is different; most providers have their own dashboard or user interface, and Port Forwarding settings are found in different places according to your provider. You will also need to know the credentials to login to your router's admin settings, which you may or may not have knowledge of.
If you do know your router's admin settings credentials:
Your best option will be to Google "[your ISP] port forwarding". This should help you find where port forwarding settings are in your provider's settings.
If you do not know your router's admin settings credentials:
Your best option will be to contact your service provider and inform them that you need to port forward and need your router's admin panel credentials. They should be able to at minimum provide these for you, if not walk you through how to set up the port forward.
Finally, a video from Jimmy is Promo on how to address relay, if that's more your style: