Home Radio waves Did the helium leaders line their own pockets without delivering the product?

Did the helium leaders line their own pockets without delivering the product?

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Source: Adobe/FellowNeko

frames to Helium (HNT), a developer of a “decentralized wireless infrastructure”, together with their family and friends, hoarded the majority of the wealth when the project was launched, complaints Forbes.

It’s a $1.2 billion Web3 company that said it’s building a global wireless internet connection called “People’s Network.” Helium COO Frank Mong wrote that one of principles of the Helium network is equity, saying that “everyone has an equal chance to exploit”.

But Forbes painted a very different picture of the business – an antonym of fair.

According to its report, People’s Network users have seen “extremely small crypto rewards”, claiming that,

“Helium has enriched a handful of people disproportionately: its leaders and their friends.”

Lee Reiners, Director of Policy at Duke Financial Economics Centerwho teaches cryptocurrency law to Duke Lawwas quoted by the media as saying that,

“This thing was set up to enrich the founders and early supporters at the expense of ordinary people.”

Forbes claims to have reviewed “hundreds of leaked internal documents” and transaction data, and interviewed five former Helium employees, finding that despite project insiders promoting democracy and fairness, a majority of the wealth generated in the early days of the project, when it was most lucrative, went to these insiders.

The authors claim to have identified 30 digital wallets that appear to be connected to Helium employees, friends, family, and early investors. These wallets show 3.5 million HNT mined, almost half of all tokens mined in the first three months after the network launched in August 2019.

Then, within six months, more than a quarter of all HNT had been mined by insiders – valued at some $250 million during the token’s peak last year. After the crash, the tokens are still worth $21 million.

The authors state that,

“While Helium and its executives have publicly discussed their incentive plan — a program called Helium Security Tokens, or HSTs, which guarantees about a third of all HNT for insiders — they have yet to disclose the windfall. additional from the public offering of Helium tokens, worth millions, which has been identified by Forbes.

This means that when Helium rewards per hotspot peaked, just over 30% went to the community, while insiders claimed the rest. Each hotspot earned an average of 33,000 HNT in August 2019, while each hotspot now only earns around 2 HNT per month. So executives, friends, family and some early investors made bargains on top of guaranteed dividends before profits plummeted.

The article also claims that some insiders exploited known vulnerabilities in the company to further pack their bags.

“Nothing Unreasonable”

That said, Amir Haleem, co-founder and CEO of Helium, described the project on Discord as “by far the fairest token distribution of any project I know of.”

Haleem further stated in an interview that about half of the initial hotspots have been distributed to employees, as well as their family and friends.

“None of these numbers strike me as unreasonable or blatant in any way,” he told Forbes.

However, a hotspot linked to Haleem’s wife posted details of a California home the couple owned, and five hotspots connected to that wallet mined 250,000 HNT in the network’s first three months – earning a total of 455 000 HNT through mining rewards, worth $25 million at HNT. peak price, and $2 million today.

It is unclear when or if Haleem sold these tokens and he declined to comment, the authors said.

Another example is COO Frank Mong. According to Forbes, in a single day in August 2021, a wallet that appears connected to Mong received nearly a dozen payments – worth almost $1 million – from two other wallets linked to him. The sum has been moved to a Binance wallet.

When asked if Helium should have disclosed this additional insider boon to the community, Haleem replied that,

“I don’t know why we would be asked to be able to reveal anything about these people… They took a huge risk and a huge chance to pay money to build something.”

Haleem claimed that some crypto projects reserve up to 90% of initial token supplies for investors and team members, which Forbes could not prove, and Haleem would not provide an example. “This is the playing field we are always on in crypto, rightly or wrongly,” he said. “The generally accepted reality is that someone has to start the network.”

More than one alleged problem

Helium also appears to be struggling to generate revenue from its network, Forbes claimed, adding that between June 2021 and August 2022, only $92,000 in revenue was generated from data moving across the network – per compared to the $250 million the parent company raised from investors. Helium generates the vast majority of its revenue from people registering their new access points and authenticating other devices on the network.

Source: Forbes

The company may also have exaggerated the nature of some of its partnerships, with Helium later removing some companies from its website where they were listed as customers.

Helium is supported by Andreessen Horowitz and world tiger, among other investors. None of these companies appeared in the first insider group, Forbes said.

As of noon UTC on Monday, HNT is trading at $4.52. That’s almost 1% in one day and 14% in one week. It is down 24% in one month, 74% in one year and 92% since its all-time high of $54.88 recorded in November 2021.

The company says it is currently building Helium 5G, working with wireless carriers PLATE and T-Mobilewhereas they announcement the launch of the MOBILE token to reward hotspot owners for building the 5G ecosystem.

And while some applauded the Forbes report:

Others criticized it:

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Learn more:
– Helium price benefits from Solana’s migration plans – What’s next for HNT?
– HNT price remains largely unaffected by Helium “user” controversy

– Helium Blockchain: Decentralize wireless networks
– How Helium uses cryptography to develop a decentralized Internet

– Carpet pulls were rampant in August but have declined slightly in previous months – Report
– South Korean Kok Play Token masterminds reportedly under legal investigation, investors ‘must escape now’