With the fall of the star public chain, what did Helium do wrong?

Original author: Jaleel, Leo, BlockBeats

< /p>

On April 20th, Helium announced that it has officially completed the migration to the Solana network, but the community's response was one of embarrassment.

Helium dates back to 2013, just a few years after Bitcoin, and In the first few years of its establishment, Helium can be said to be an Internet of Things project, which has nothing to do with the blockchain. Until 2017, Helium realized the value of the blockchain, and then took advantage of the incentive model of the blockchain. Now It seems that Helium's decision is very correct.

After a steady development in 2019-2021, Helium will usher in its peak in 2021. In 2021, $111 million in financing will be completed through Token sales; in early 2022, $200 million in Series D financing will be completed at a valuation of $1.2 billion. Its financing amount is very exaggerated in various public chains, and it is not much worse than the public chain Aptos (Aptos publicly disclosed the financing amount of 350 million US dollars in 2022). As an emerging public chain, Helium's potential and prospects are very good. This is also the initial state where Helium started higher.

Helium's potential and prospects come from its mining mode, its original PoC (Proof of coverage) is an optimized version of the PoW mining mechanism, which can also be regarded as a geographic location PoW mining mechanism. It is completed through wireless network technology. Welcomed by users. According to Chief Operating Officer Frank Mong, nearly 450,000 hotspots have been deployed in the community, and the network covers more than 340,000 cities and 161 countries and regions. About 3,000 new hotspots are added every day, and more than 5,000 new cities are added every month. In 12 months, the number of hotspots recorded by the network increased by more than 3000%.

And the reason why Helium has attracted the wide favor of many star institutions may be its excellent concept and emerging narrative-decentralized Internet and geographic location oracle: a Decentralized wireless network for "Internet of Things" devices.

The Internet of Things is very different from the traditional Internet and the mobile Internet. The connection between objects and objects can realize the Internet access of objects, so the number of connectable terminals has become an important competitive advantage of the Internet of Things. Shared bicycles, smart cities, smart agriculture, driverless smart cars, and smart homes all belong to the category of the Internet of Things.

Helium is powered by cryptocurrency and the wireless network consists of devices called Helium hotspots, which The device has an antenna that can send small amounts of data over long distances using radio frequencies. It can be said that among all the projects, Helium's narrative is very bright.

However, as time goes by, the high-yield bubble that was originally hidden in the new chain The following problems gradually emerged. How did Helium blow a good hand, and what did the team do wrong? Why did the team abandon Helium and migrate to the Solana chain instead? Let's start with Helium's mining mechanism.

The main mining mode is Helium, but professional miners have no advantages

Helium hotspots provide wireless network coverage for millions of devices using LongFi around, and miners get Token rewards HNT .

The core of the Helium network is the LoRaWAN communication network, which has built an incentive layer. And through its unique Poc (Proof of Coverage) consensus to prove that HotSpot provides network coverage. Proof miners are elected to the consensus group roughly every 30 blocks and receive transactions submitted by other miners to package them into blocks.

Because Helium's hotspot mechanism is closely connected with the mining mechanism, it was very popular in the early stage. HNT mining equipment is also very light and compact, similar to a home router, with low environmental requirements, the construction of a network is not affected by the surrounding environment, and mining can be started at home or in the office, so the energy consumption is extremely low. For a LongFi device that transmits every five minutes, it only costs about $1.04 a year to use the Helium network. As a typical PoW mining model, mining on Helium costs no electricity.

The most suitable BOBCAT miner for the domestic frequency band CN470 at that time cost around $429. They are said to be almost 200 times more effective than traditional Wi-Fi hotspots, and can even use them to share their owner's bandwidth with nearby Internet-connected devices like parking meters, air quality sensors, or smart kitchen appliances.

The deployment steps of Lynx mining machine are also very simple, only need to connect the antenna and network cable of the mining machine Connected; download Helium Hotspot to create a wallet, verify the mnemonic; set up the hotspot, find the machine type pairing connection; configure the WiFi network to connect the device to the network; burn 10 dollars worth of HNT as a gas fee to declare the device deployment location, and synchronize the block; The hotspot antenna and location information are updated on the home page, and mining can start after the chain is hooked up.

Since the mining operation steps are very simple, the mining machine has almost no follow-up equipment maintenance costs, and has low environmental requirements, why do professional miners complain that it is difficult to enter?

It turns out that after being rated as the most popular hotspot of the year by the community, the "Lynx" mining machine There are fewer and fewer stocks, and the domestic price is generally fired to 2000-2500U per unit, and the cost of mining for miners is gradually increasing.

At the same time, it is precisely because of Helium’s unique mining mechanism that There was a problem at the mining level, which made it impossible for professional miners to enter.

Different from traditional mining machines, Helium does not mean that the more intensive the deployment, the higher the income. In order to ensure more stable income and higher output, the distance between hotspots must exceed 300 meters to get rewards, which is convenient for hotspots to participate in PoC (Proof of Coverage) to obtain higher income, so hotspots do not need to be deployed too densely . Considering the building density of the city, the optimal distance between hotspots is best within the range of 500-1000 meters. The deployment distance of miners is restricted by many complex conditions, so many specific coverage effects have been debugged and optimized many times.

This adds a lot of difficulty to the mining process, and professional miners buy a lot of mines Machines do not have any advantages, and even if you stock up on ten or hundreds of machines in one go, you cannot deploy them in a centralized single location. This model dictates that the majority of Helium users are companies like Lime (which uses Helium to monitor its connected scooters) and Victor (the mousetrap company that uses it for new internet-connected traps).

Suspected of falsely promoting partners

Lime and Helium both belong to the Internet of Things category and have very obvious strong combination properties. Users can see Lime scooters available near their location based on their connection to Helium.

Lime is a short-distance travel sharing platform founded in San Francisco, USA. The company initially provided shared bicycle services. Later, the business expanded to shared scooters, electric bicycles and shared cars. In less than a year, it has obtained more than 300 million US dollars in financing, with a valuation of 1.1 billion US dollars, and quickly extended its business to California, Florida, Washington...

April 2021, Lime was listed as #20 by Time Magazine 21 Time100 Most Influential Companies one. As of March 2022, Lime is operating in more than 150 cities in more than 30 countries and is part of a trial approved by the UK Department for Transport.

Lime and Helium have strong cooperative attributes, if they can reach a cooperative relationship, it is simply a strong Join forces.

However, Helium does not seem to be working hard to expand its cooperation territory and win the Lime market. Prominently displaying the logo on its website without confirming the partnership is suspected of false advertising.

August 2022, a Lime spokesperson stated: "From the summer of 2019 It has not had any contact with Helium since a brief initial test during which it made it a condition not to use the Lime company's name in promotional material. It is now aware of this and is preparing to issue a complaint on its website and marketing. Send Helium a cease and desist order using Lime's name and logo."

As reported , Helium has claimed for years that Lime is using its technology for geolocation, and a Salesforce spokesperson confirmed that the company is not working with Helium. Instead of a partnership with Lime or U.S. software giant Salesforce, Helium has both companies' logos prominently displayed on its website, prompting outrage from the community. Under heavy pressure from the community and "partners", Helium's official website page removed the logos of the two companies from the cooperation list.

The turmoil of this incident seems to have broken the potential future partnership between Helium and Lime.

Single mining machine earns only $20 per month

Although the increase in the number of hotspots has allowed Helium to generate more than $1 million in monthly revenue. However, revenues start to decline in 2022.

July 2022, crypto investors Liron Shapira posted on social media that the decentralized wireless communication network Helium has received a sky-high financing of US$365 million, but the monthly income of the Helium network and the monthly income of a single mining machine are not satisfactory According to his statistics, the monthly income of the Helium network is only 6,500 US dollars, while the monthly income of a single mining machine is only 20 US dollars.

More than that, in Helium's Reddit community, more and more information about Helium's rate of return can be seen Dismal remarks. They spent an average of US$400-800 on a mining machine (hot spot), and the total mining machine sales exceeded US$250 million, and the nodes hoped to get a return of US$100 per month. However, the fact is that the current monthly income of a single node and single mining machine is only $20.

One stone stirred up a thousand waves, as Liron Shapira and the dissatisfaction of the community grew louder and aroused extensive discussions, Helium Founder Amir and Multicoin Capital managing partner Kyle Samani also had to respond.

Helium founder and CEO Amir retorted: "The Helium network makes about 1.5 million dollars a year. HNT, not 30 million as reported. The network incurs about $2 million in monthly fees, most of which are hotspot entry fees. Helium is building a 5G network, but it still faces coverage and cost challenges. Although Helium's Revenues are currently low, but the company has raised $250M+ in venture capital and is building a distributed network to solve IoT problems.”

Multicoin Capital managing partner Kyle Samani did not dispute the figure. But he thinks IoT customers have long lead times, and customers didn't take Helium IoT seriously until 6 months ago, 6-12 when you factor in network testing, hardware upgrades, service portal updates, and shipping. month's time.

Two months later, Helium announced that it would give up building its own blockchain Turn to Solana. Since then, Helium’s monthly income has continued to decline. In October, the monthly income began to fall below the million-dollar mark, and the income of Lynx mining machines became extremely low. Many people quit the circle at this time. The once hot Lynx mining machine seems to have become history today.

The programming language is unpopular and incompatible with EVM, making it difficult for developers to enter

Helium L1 is developed and written in Erlang language, which is not common in the crypto community. While this has attracted core developers and contributors in the blockchain community, the Helium developer community is relatively small compared to the Rust language used by Ethereum, Solidity and Solana.

Erlang is an interpreted language that runs on a virtual machine, but now also includes a native code compiler , since the R11B-4 version, Erlang also supports script execution. In terms of programming paradigms, Erlang is a multi-paradigm programming language, covering functional, parallel and distributed. Sequential Erlang is an eager evaluation, single assignment, and dynamically typed functional programming language.

Compared to Helium's unpopular programming language and development environment, after the 2020 DeFi summer, The ecosystem of Ethereum EVM has reached unprecedented prosperity.

So BSC has supported EVM in the early stage of the ecology, so developers can easily migrate and deploy Ethereum Square DApp. Today there are more than 200 GameFi projects on BSC, and according to Dappradar data at the end of 2021, 4 of the top 10 GameFi are from BSC. Then PlatON also released a new version compatible with the Ethereum ecosystem in November 2021, realizing a seamless connection with the Ethereum platform.

Of course, Helium has its own considerations if it is not compatible. For example, the EVM compatible chain may be affected by Ethereum The constraints of the roadmap will interfere with the development plan of the ecology; at the same time, choosing an ecology for independent development without being compatible with EVM also jumps out of the thinking of the EVM framework and can realize many differentiated functions.

However, Helium is clearly more affected by shortcomings. The standard by which we judge the prosperity of an ecosystem usually comes from the number and activity of GitHub developers. Therefore, according to the latest data provided by @ProofofGitHub , in GitHub's daily development activities, some famous public chains that are not compatible with EVM There are far more developers on GitHub than Helium.

Most of Helium's developers are in Europe and America, but almost no developers in Asia are paying attention and contributing. Since the number of developers of Helium has been unable to compare with other public chains, and there are not many outstanding applications online, the ecology on the chain has hardly been shaped. This situation has lasted for a long time and has not been greatly improved.

I don’t understand the market and have not established a solid Web3 application layer

< br>

Actually, Helium’s situation is not very difficult to solve. Their “dismal return” status quo can be reversed by making some changes In the battle situation, successful public chains often have many excellent developers or perfect ecological applications. Taking a step back, for Helium, creating or cooperating with a class of popular applications can make it comeback. Therefore, if Helium wants to turn against the wind, it can refer to Chainlink or StepN.

Chainlink before and StepN after

First of all, everyone is familiar with Chainlink. As the most well-known price oracle solution for DeFi, it provides a good way for off-chain information to be input into the chain. Ways and means, Chainlink is a product of the blockchain technology company SmartContract. It started with the "ChainLink: Decentralized Oracle Network" white paper released in September 2017. It completed the ICO in the same year and raised funds of 32 million US dollars. In the following years, Chainlink continues to cooperate with various blockchain projects. The 2022 Bank of America Research Report pointed out that there are more than 1,100 blockchain projects, such as Aave, Yearn.Finance, Paxos, Uniswap and other well-known blockchain applications, and even the U.S. Organizations such as The Associated Press, AccuWeather, and others also operate nodes on the Chainlink network.

Chainlink Token is LINK, which is mainly used to pay off-chain data providers and ChainLink nodes Operators and other online service providers, as a service fee, need to pledge a large-scale LINK before operating a node, and then the node can obtain LINK as a return if the node provides true data; on the contrary, if the node provides wrong data or service errors, it may be blocked. Deduct the pledged LINK.

Helium can refer to the Chainlink model to build itself, provide high-quality incentives, and Many blockchain applications cooperate to take advantage of their own advantages. Unlike many other encryption projects, Helium’s advantage at the time was that a large number of real users were using its products every day, and the people involved were hardly speculators. , but people who are interested in creating decentralized wireless networks, people who like decentralization, this kind of group is very attractive for every encryption application.

Secondly, When it comes to geographical location PoW mining, the first thing you will think of is The popular Move to Earn game StepN in recent years, StepN has attracted a large number of users to participate with its unique core concept. It realizes running and earning money by paying attention to the concept of users' physical health. Its unique incentives and core concept attract a large number of users Actively participate and become the leader in the GameFi field since 2022, with strong user stickiness and user groups.

As mentioned earlier, most of the developers of Helium are in Europe and America, and there are almost no developers in Asia. Developers are paying attention and contributing. In recent years, the encryption industry has gradually begun to develop "from west to east" due to regulatory and other issues. StepN has done a good job in this regard, making full use of the huge Web 3 user base in Asia. The same is geographical location PoW mining. The rise of StepN is also the time when Helium is in its prime. The concepts overlap, and user groups can promote each other. Helium users are concentrated in the west, and StepN has an eastern market, and the two projects have their own advantages.

The Helium application layer is weak, while the StepN application is strong. For the Web 3 project party, these two must be the most suitable projects for cooperation in the entire market.

Of course, Helium has neither followed Chainlink nor StepN The cooperation took advantage of the momentum, and they didn't seem to care so much about the Web3 application layer. In fact, this can be seen a long time ago. The unpopular programming language is not compatible with EVM. As an encryption project, Helium actually doesn’t know much about the encryption market and users. The network is not a very pure cryptocurrency team, and of course it cannot attract high-quality developers and applications on the chain.

Turning to Solana, which was greatly affected by the FTX thunderstorm

On April 20th, Helium announced that it had completed the migration to the Solana network, which sparked a lot of discussion in the community. Helium's migration to Solana is a very "interesting" decision that will have some impact on both projects.

In addition to the above, the Helium ecosystem has no high-quality applications and cannot attract high-quality development Or, migrating to other networks is a high-probability event, but why choose Solana, which has been greatly affected after the FTX thunderstorm, perhaps for higher performance and scalability?

Since Solana is known for its high throughput and low latency, migrating to Solana may help to increase Helium's transaction processing speed so that it can better meet growing demand. Previously, the Helium community was actually overloaded with a large number of events, such as consensus rule updates, bug fixes, and on-chain governance. There are already many Layer1 blockchains to choose from in the market, rather than investing a lot of time and effort to maintain Helium, it is better to take advantage of existing market resources and benefit from them.

Solana has relatively low transaction fees and integrates a large number of developers and applications, which will Broadening Helium's scope of cooperation may also help reduce transaction costs on Helium, and more developers and applications may be willing to integrate Helium, thereby promoting wider adoption and recognition, and also contributing to the development of the application layer, making up for other Flaws that don't apply much. The security of Solana has also been recognized by the industry, and Helium's migration to Solana may improve its overall security. This is crucial for a project aiming to provide reliable IoT connectivity.

There are many advantages and disadvantages. Helium chooses to migrate to the Solana network. There may be some Potential downside, migrating to the Solana network requires investing time and resources in technology development, testing and deployment. This may result in increased development costs in the short term, delays in project schedules, and migration to the Solana network may require Helium to reintegrate with existing partners, developers, and users. This may present some communication and coordination issues.

But Solana is still a relatively new blockchain platform (compared to Ethereum etc. ), therefore, there may still be certain technical risks, such as potential bugs, instability, or compatibility issues with existing technologies.

Moving to the Solana network may affect the acceptance of Helium's existing community "Some loyal community members of the decentralized wireless network" may be concerned and opposed to this, which may lead to community splits or user loss.

There are already many other projects and applications on the Solana network, Helium in this ecosystem may be face greater competitive pressure. This may have some impact on Helium's market share and development speed. In addition, there may be regulatory issues. Since different blockchain networks may be affected by different regulatory policies, migrating to the Solana network may expose Helium to new regulatory risks, such as laws on data privacy and cross-border data transmission. Require.

Of course, now that Helium has been successfully migrated to Solana, it has indeed made some changes to Helium’s existing technology Some changes have been made, which is a benefit of migrating to Solana, but potential problems have not yet surfaced.

Conclusion

< /p>

As Helium has stated before, Helium was not originally an encryption business, but was trying to build long-range, P2P wireless networks in the traditional way. Later, due to financial problems, encryption became an incentive method. Helium turned to encryption technology to build a decentralized network. It received good reviews and many loyal users in the early stage, which is the reason why Helium won at the starting point.

However, the move of "turning to encryption" made Helium, who did not fully understand the encryption field, miss There are many opportunities to change the status quo: a large number of professional miners are unable to enter the market, they are suspected of falsely promoting their partners, there are cheating behaviors in the exploded system, unpopular programming languages have caused difficulties for developers, they do not understand the market and have not formed an application ecosystem, and they migrate to FTX. The public chain most affected by the crash.

The Helium project dabbles in crypto, but doesn't understand crypto in depth (cryptocurrency, user , ecology, market, narrative), and its team is not entirely part of the cryptocurrency team. While similar projects took off, Helium did not choose to collaborate or learn, which may be the reason for its current status. It seems reasonable that Helium "has been reduced to this day". It can be said that the story of Helium has reference significance for all public chains...

But fortunately, within a week after migrating to the Solana network, the new Token IOT launched by Helium rose by more than 380%. Like HNT, IOT is also mined through Helium hotspot equipment. These Tokens are supported by the original HNT and can be converted to HNT eventually.

Whether Helium can take this opportunity to regain its initiative in the market, I believe Everyone is looking forward to the answer given by Helium.

Welcome to join Rhythm BlockBeats official community

Telegram subscription group: https://t.me/theblockbeats

Telegram communication group: https://t.me/theblockbeatsApp

< /p>

Official Twitter account: https://twitter.com/BlockBeatsAsia

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia