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Angel investor Liron Shapira said that decentralized wireless internet protocol Helium (HNT) generated only $6,500 monthly for investors after the hundreds of millions invested in the firm.
.@Helium, often cited as one of the best examples of a Web3 use case, has received $365M of investment led by @a16z.
Regular folks have also been convinced to spend $250M buying hotspot nodes, in hopes of earning passive income.
The result? Helium's total revenue is $6.5k/month pic.twitter.com/PyW6KPllvc
— Liron Shapira (@liron) July 26, 2022
Helium returns have been poor
In a July 26 Twitter thread, Shapira claimed that users who spent between $400 and $800 buying the hotspot nodes per month have complained about the poor returns.
Instead of the expected returns of $100 per month, users have been getting around $20.
Shapira claimed that even the $20 return is due to “a temporary subsidy of $19.99 from investment in growing the network, and speculation on the value of the $HNT token.”
It means that the actual revenue is only $0.01 per month.
No end users demand
Additionally, he claimed that Novalabs, the company behind Helium, gets $300 million (30 million HNT) annually from the network.
Meanwhile, according to Helium network rules, $300M (30M $HNT) per year gets siphoned off by @novalabs_, the corporation behind Helium.
This "revenue" on the books, which comes mainly from retail speculators, is presumably what justified such an aggressive investment by @a16z.
— Liron Shapira (@liron) July 26, 2022
Shapira said this revenue comes mostly from retail speculators on the HNT token because the Helium network does not have an end-user demand.
In his opinion, this is responsible for its lack of revenue despite having over 500,000 hotspots. But “the complete lack of end-user demand for Helium should not have come as a surprise.”
He added, “a basic LoRaWAN market analysis would have revealed that this was a speculation bubble around a fake, overblown use case.”
Helium’s response
Helium leadership has responded to Shapira’s claims with a Twitter thread defending the network.
Amir Haleem Helium CEO stated that Nova Labs has only raised $250 million since launch, and it “was for equity in the company, not for tokens in the network.”
our good friend and web3 enthusiast @liron wrote this thread below critiquing @helium that has gained some traction. there are some points here that I wanted to address
a 🧵 https://t.co/HlJljE8q0Z
— amir.hnt (🎈,🫡) (@amirhaleem) July 26, 2022
He also touched on the revenue claims, saying Helium generates $2 million monthly from onboarding fees.
so why is there only $6,500 worth of data being paid for? unlike cellular networks there aren’t millions of existing devices that can switch to @helium. the best applications haven’t been built yet, and it takes months or years to build them
— amir.hnt (🎈,🫡) (@amirhaleem) July 26, 2022
Haleem said the $6,500 alleged revenue was from the monthly 650 million data packets sent over the network. He continued that the number is small because most of the devices and applications that can use it have not been built.
He also disagreed with the claim that the Helium service has no demand in the market. According to him, Helium focuses on LoRaWAN and already has a waiting market.
He said that the network has close to 1 million nodes and covers 10% of the world’s population. The time horizon is 5-10 years, and only after that can anyone consider Helium to have failed.
Shapira reiterates claims
Meanwhile, Shapira has posted a rejoinder disagreeing with the claims and reiterated that Helium is a failure waiting to happen.
.@Helium's CEO @amirhaleem and investor @KyleSamani replied to my thread about Helium
They didn’t deny the shocking data I shared, or explain why the project failed so bad.
But I appreciate their willingness to have an open Web3 debate. Sorely needed.https://t.co/owbnlEYw0R pic.twitter.com/px5Gp2Frs5
— Liron Shapira (@liron) July 27, 2022
According to him, the Helium team has “built a Web3 bridge to nowhere.”
Shapira also mentioned that Helium’s response to his thread “didn’t deny the shocking data I shared, or explain why the project failed so bad.”