Helium is touted as the best real-world use case for Web3 technology. But at a time when the project struggled to generate revenue, a Forbes investigation found that Helium executives and their friends quietly hoarded most of their wealth in the early days of the project.
The $1.2 billion Web3 company Helium, which has raised funding from a16z and Tiger Global, says it is building “People’s Network,” a global network that provides wireless internet connectivity for things like parking meters and dog collars . All users have to do is pay $500 for a machine that looks like a Wi-Fi router, plug it into the wall, and receive Helium’s cryptocurrency in return (a recurring passive income stream). An investor in Helium claims that owners can get back the money they bought within a few weeks.
If demand for the Helium system rises, pushing up the value of its Helium Network Token (HNT), the company has hinted that the network’s benefits will be shared by all. But after being exposed by Forbes, he was severely “slapped in the face”.
The founding of Helium and internal bugs
In 2013, Napster co-founder Shawn Fanning and then-famous game designer Haleem launched a startup called Skynet Phase 1, which was a reference to the genocidal computer systems in the Terminator movies. The company, later renamed Helium Systems, claimed to be creating wireless networks for the Internet of Things, one of the hottest areas for venture capital.
Building on Shawn Fanning’s fame, Helium raised $15 million in 2014 from big-name investors including Khosla Ventures and Salesforce founder Marc Benioff. But after five years of failed product launches fueled by a $50 million investment, Helium turned to the burgeoning crypto market, with a “user network” unveiled in August 2019. (Shawn Fanning left the company before it went live, according to three sources.)
But at the same time, Helium found that its new system was littered with cheaters. To artificially increase the reward, some users buy multiple hotspots, sometimes dozens, and manipulate their locations so that they appear to be scattered across a city or town, when in fact they are all in one place. This creates a clear signal when machines authenticate each other, and therefore more tokens. Employees at Helium say the phenomenon is common.
Although the community now manages a blacklist of more than 70,000 hotspots that may belong to cheaters, and Helium claims to have implemented anti-spoofing measures, within the company it is well known that employees are involved in this behavior, three former “When you see customers doing this, you think, why don’t I just grab a bite,” said the Helium employee .
Haleem says it has been focusing on how to tackle deception, and nearly 12 months after its launch, Helium says its hotspots cover more than 1,000 cities in North America. Soon after, major crypto exchanges Binance and FTX listed their tokens, allowing people to buy, trade, and sell HNT. By July 2021, there are more than 100,000 online hotspots, although HNT rewards are steadily declining. Like other cryptocurrency projects, Helium initially issued the largest Token, with more than 60 million HNT issued in the first year. According to the project document, this number is halved every two years in order to protect the value of the cryptocurrency.
In August 2021, a16z led a $110 million token financing, and Helium’s token price continued to rise until it reached $55 in November. At the time of the sale, the three a16z partners wrote in a blog post that Haleem’s dream of “creating a more connected world” had become a reality.
A New York Times article from February this year pretty much covers Helium as a Web3 success story. A few weeks later, Helium announced that it had reached a valuation of $1.2 billion after raising another $200 million. In February, Helium launched a new company called Nova Labs. “This is the fastest global wireless network rollout ever,” Haleem wrote in a blog post announcing the funding.
When Helium first launched, it created a special token — Helium Security Tokens, or HST for short, which guaranteed that roughly one-third of Helium Tokens would be transferred to investors and company executives as compensation for supporting the network . Although users complained that their rewards were reduced. CEO Haleem praised on Discord: “The fairest token distribution of any project I know of so far.”
Fertilizers don’t flow to outsiders – profits go to the pockets of a few insiders
Helium hotspots earned the most tokens during the first three months of the network, when company insiders made up a large portion of the Helium mining community.
Helium overstates its partnership
In August, the U.S. city of San Jose decided not to renew a pilot project with Helium after it failed to subsidize internet fees for low-income households by mining HNT. The city bought 20 hotspots last year, and the amount of HNT each miner generates has dropped. Clay Garner, chief innovation officer for the mayor’s office, told Forbes: “Attribute the decline in HNT generated to a lack of data being transmitted over the network. San Jose can’t afford projects that don’t scale significantly.”
The company also appears to have exaggerated the nature of some partnerships. In July, internet news blogs Mashable and The Verge accused Helium of overstating its relationships with enterprise customer Salesforce and electric scooter-sharing company Lime. The two companies confirmed to Forbes that they do not use Helium, despite being listed as customers on the company’s website (Helium has removed Salesforce and Lime from its website).
John Stark, a former SEC official who heads the agency’s Office of Internet Enforcement, said: “Helium’s apparent exaggeration of these commercial partnerships, coupled with its reliance on revenue from login fees rather than actual use of its network, could incur Helium’s Regulatory review.”
Three years after the blockchain’s debut, Helium users appear to be growing increasingly frustrated with the company’s failure to deliver on its promises. In addition to complaining about low incomes, community members reported that they had to wait up to a year to get their hands on the hotspot. Some players claim that random variables can negatively affect their rewards once their hardware devices arrive. “I realized it’s going to take years to pay off,” Canadian Hotspot owner Jonathan Newman told Forbes. Eight months later, Jonathan Newman’s “hot spot” is finally here, and is expected to make around $150 a year, a far cry from the returns he was pitched in the first place.
Due to low network usage, community dissatisfaction and falling cryptocurrency prices, Helium is now trying to grow its community on a brand new network. (Odaily Planet Daily Note: On September 22, Helium’s proposal to migrate the network to Solana was voted on.)
The company said its next move is to build the Helium 5G network, which provides decentralized connectivity to the latest version of cellular devices. These include partnerships with DISH and T-Mobile, two of the largest wireless carriers in the United States. Helium will pay the latter to access its network. Last month, the company announced the launch of a brand new Token MOBILE to reward hotspot owners for building its 5G ecosystem. Currently crypto enthusiasts need to participate in the network by purchasing an upgraded hotspot for $1,000 to $2,600.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/forbes-exposes-the-inside-story-of-helium-false-propaganda-hematopoietic-difficulties-executives-accumulating-money/
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