Helium is a project that focuses on the Internet of Things (IOT), ie the network of connected objects. In addition to the HNT which is the native token of the project, Helium uses another type of token named Data Credits in order to allow its users to pay transaction fees.
Nevertheless, a recently published report by Forbes lays heavy charges against Helium’s management members. Did the latter benefit from the project to the detriment of the community?
Feedback on how the Helium project works
Founded by Amir Haleem in 2013, its network went live only in 2019, and that after raising more than $53 million. Subsequently, Helium was fortunate to benefit from investments from Tiger Global and FTX Ventures which injected nearly $200 million into the company.
With the main aim of creating a decentralized network of connected objects, the project uses a validation mechanism called Proof of Coverage. Concretely, this term refers to a process by which remuneration occurs when an individual uses your network. But in the case of Helium, it was mainly the mining that won over the public.
From the user’s side, the project’s proposal was simple: all you had to do was spend $500 to get a hot spotnamely a machine that looks like a wifi router, then simply plug it into an electrical outlet in order to receive the HNT cryptocurrency as a reward.
Of course, the analyst reports predicted a return on investment in just a few weeks. On paper, the system had all the characteristics of a great opportunity.
The problem ? The only individuals who have truly enriched themselves are the members of the Helium project management team and their friends, and this is no accident.
On this, Lee Reiners who is the Director of Policy at the Duke Financial Economics Center said:
โThis thing was set up to enrich the founders and early adopters at the expense of ordinary investors. ยป
From Forbes’ review of hundreds of leaked internal documents as well as interviews with five former Helium employees, it becomes clear that the frontrunners quietly amassed the majority of tokens early in the project. This while they were touting the democratic spirit of their network named “People’s Networkโ is the network of the people in French.
Helium: a future compromise?
Analysts specializing in the blockchain sector have identified 30 digital wallets belonging to various employees of the Helium project and their families or relatives.
In total, this group of wallets mined more than 3.5 million of HNT tokens, equivalent to almost half of all Helium tokens mined in the first three months of the network’s launch in August 2019. In six months, more than a quarter of all HNT were mined by insiders.
Amir Haleem, the general manager of the Helium project, explained himself by announcing in an interview granted to Forbes that approximately half of the first hotspots had been distributed among the employees and the families of the latter. On this subject, Amir Haleem continues and adds:
โNone of these numbers strike me as unreasonable or excessive. ยป
And when asked if Helium should have been more transparent about these issues with its community, the project’s general manager points out:
โI don’t know why we would be asked to reveal anything about these people. They took a huge risk with their money with the goal of building something. ยป
Three years after its debut, Helium users are expressing their frustration with the company’s inability to deliver on its lofty promises. Along with complaints about low revenue, community members say they waited up to a year for their hotspots to ship.
Following these accusations and the change in attitude of the SEC which is now preparing to attack certain crypto companies in connection with the listing of unregistered securities, the price of the Helium cryptocurrency has fallen sharply. Currently at โฌ4.89the HNT is now a long way from its historic peak of 46.06 euros dating from November 14, 2021.
