Original Author: Jaleel, Leo, BlockBeats
On April 20th, Helium announced that it had officially completed the migration to the Solana network, but the community's reaction was one of embarrassment.
The history of Helium can be traced back to 2013, only a few years later than the birth of Bitcoin. 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 that The value of the blockchain, and then relying on the incentive model of the blockchain to take advantage of the trend, now it seems that Helium's decision is very correct.
After a steady development from 2019 to 2021, Helium will reach its peak in 2021. In 2021, USD 111 million in financing will be completed through Token sales; in early 2022, USD 200 million in Series D financing will be completed at a valuation of USD 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.
The potential and prospect of Helium 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. It is characterized by Low energy consumption, no need for a large amount of electricity, and extremely low entry threshold for mining, so it is 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%.
The reason why Helium has attracted the widespread favor of many star institutions may be its excellent concept and emerging narrative-decentralized Internet and geographic location oracles: 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 Internet of Things focuses on the connection between objects and realizes the problem of connecting objects to the Internet. Therefore, 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 encryption, and the wireless network consists of devices called Helium hotspots, which have antennas 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 passed, the problems that were originally hidden under the high-yield bubble of the new chain 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? Let's start with Helium's mining mechanism.
Helium is the main mining mode, but professional miners have no advantage
Helium hotspots provide wireless network coverage for millions of devices using LongFi around, and miners get Token rewards HNT for this.
The core of the Helium network is the LoRaWAN communication network, for which an incentive layer is built through the blockchain. And it proves that HotSpot provides network coverage through its unique PoC (Proof of Coverage) consensus. Proof miners are elected to the consensus group approximately every 30 blocks and receive transactions submitted by other miners and pack them into blocks.
Because Helium's hotspot mechanism is closely connected with the mining mechanism, it was very popular with the community in the early days. 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, using the Helium network costs only about $1.04 a year. As a typical PoW mining mode, mining on Helium costs no electricity.
At that time, the most suitable BOBCAT Lynx mining machine for the domestic frequency band CN 470 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 such as parking meters, air quality sensors, or smart kitchen appliances.
The deployment steps of the Bobcat mining machine are also very simple. You only need to connect the antenna and network cable of the mining machine; download Helium Hotspot to create a wallet and verify the mnemonic; HNT worth 10 US dollars is used as a gas fee to declare the location of the device and synchronize the blocks; update the hotspot antenna and location information on the home page of the device, and start mining after the chain hangs up.
Since the operation steps of mining 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 the market?
It turns out that after being rated as the most popular hotspot of the year by the community, the "Lynx" mining machine has become less and less in stock, and the domestic price has generally been fired to 2000-2500 U per unit, and the cost of mining for miners has gradually increased.
At the same time, it is precisely because of Helium's unique mining mechanism that it has problems at the mining level, making it impossible for professional miners to enter.
Unlike 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 should be in the range of 500-1000 meters. The deployment distance of miners is restricted by many complex conditions, so the specific coverage effect has been debugged and optimized many times.
This adds a lot of difficulty to the mining process. There is no advantage for a professional miner team to purchase a large number of mining machines. Even if they store ten or hundreds of mining machines at one go, they cannot be deployed 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).
Alleged false promotion of partners
Lime and Helium 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, and later expanded its business 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...
In April 2021, Lime was named one of Time Magazine's 2021 Time 100 Most Influential Companies. 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 will be a strong alliance.
However, Helium does not seem to be working hard to expand its cooperation territory and win Lime's market. Instead, Helium prominently displays the logo on its website before confirming the cooperation relationship, suspected of false propaganda.
In August 2022, a Lime spokesperson stated: "It has not had any contact with Helium since a brief initial test in summer 2019, and at the time of the test a request was made not to use the Lime company's name in promotional materials." has been informed of this and is preparing to send Helium a cease and desist order regarding its use of Lime's name and logo on its website and in its marketing."
Helium has reportedly 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 US software giant Salesforce, Helium has caused outrage in the community by prominently displaying the logos of both companies on its website. Under heavy pressure from the community and "partners", Helium's official website page removed the logos of the two companies from the cooperation list.
And the turmoil of this incident seems to have broken the potential future partnership between Helium and Lime.
Earning only $20 per month with a single miner
Although the increase in the number of hotspots has allowed Helium to generate more than $1 million in monthly revenue. However, revenue starts to decline in 2022.
July 2022, Crypto Investors Liron Shapira He 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, while the monthly income of a single mining machine is only $20.
Not only that, but in Helium's Reddit community, more and more comments about Helium's dismal return rate can be seen. They spent an average of US$400-800 to purchase 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 thousands of waves. As Liron Shapira and the dissatisfied voices of the community grew louder, it aroused extensive discussions. Helium founder Amir and Multicoin Capital managing partner Kyle Samani also had to come out to respond.
Helium founder and CEO Amir countered: "The Helium network earns about 1.5 million HNT per year, not the reported 30 million. The network generates about $2 million in monthly fees, most of which are hotspot entry fees." Helium 5G networks are being built, but coverage and cost challenges remain. While Helium's revenues are currently low, the company has raised $250M+ in venture capital and is building a distributed network to address IoT challenges question."
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.
The response from the Helium camp did not seem to convince Liron Shapira. He once again posted a negative message about Helium, "I know that most technology platforms have their life cycle, just like do people still use CDs?" Liron Shapira even directly concluded: Helium Dead end in a Web3 world.
Two months later, Helium announced that it would abandon building its own blockchain and 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 Solidity, which is used by Ethereum, and Solana's Rust language.
Erlang is an interpreted language that runs on a virtual machine, but now also includes a native code compiler, and since R 11 B-4, Erlang also supports scripting. 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 with Helium's unpopular programming language and development environment, after the 2020 DeFi summer, the Ethereum EVM ecosystem has reached unprecedented prosperity.
Therefore, BSC has supported EVM in the early stage of the ecology, so developers can easily migrate and deploy Ethereum DApps. 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 projects 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 constrained by the Ethereum roadmap, which will interfere with the development plan of the ecology; at the same time, choosing an independently developed ecology without being compatible with EVM also jumps out of the EVM framework thinking In addition, many differentiated functions can be realized.
However, Helium clearly suffers more from the disadvantages than the advantages enjoyed by non-EVM compliant chains. The standard by which we judge the degree of ecological prosperity usually comes from the number and activity of GitHub developers. Therefore according to@ProofofGitHubThe latest data provided shows that in the daily development activities of GitHub, the number of developers of some well-known non-EVM-compatible public chains on GitHub far exceeds that of Helium.
Most of Helium's developers are in Europe and the United States, but few 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.
Didn't understand the market, didn't build a solid Web3 application layer
In fact, Helium’s situation is not difficult to solve. Their current situation of “dismal returns” can be reversed by making some changes. Successful public chains often have many excellent developers or perfect ecological applications. Take a step back In other words, for Helium, building or partnering with a hit app can make a comeback. Therefore, Helium can refer to Chainlink or StepN if it wants to turn against the wind.
Chainlink before, 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 and way for off-chain information to be input to the chain. Chainlink is a product of the blockchain technology company SmartContract, which started in 2017 The "ChainLink: Decentralized Oracle Network" white paper released in September completed the ICO in the same year and raised $32 million in funds. In the following years, Chainlink continued to cooperate with various blockchain projects. Bank of America Research Report 2022 It is 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 institutions such as the Associated Press and AccuWeather are also operating nodes on the Chainlink network.
Chainlink Token is LINK, which is mainly used to pay data providers outside the chain, ChainLink node operators, and other online service providers. LINK can be obtained in return; on the contrary, if the node provides wrong data or the service fails, the pledged LINK may be deducted.
Helium can fully refer to Chainlink’s model to build itself, provide high-quality incentives, cooperate with multiple blockchain applications, and take advantage of its own advantages. Unlike many other encryption projects, Helium’s advantage at that time was that it had A large number of real users use its products every day. The people involved are hardly speculators, but people who are interested in creating decentralized wireless networks. People who like decentralization. All are attractive.
Secondly, when it comes to geographic location PoW mining, the first thing you think of is the Move to Earn game StepN, which has exploded in recent years. StepN has attracted a large number of users to participate with its unique core concept. , its unique incentives and core concepts have attracted a large number of users to actively participate, and has become the leader in the GameFi field since 2022, with strong user stickiness and user groups.
As mentioned earlier, most of Helium’s developers are in Europe and the United States, and almost no developers in Asia are paying attention and contributing. In recent years, the encryption industry has gradually begun to develop “from west to east” due to regulatory issues. StepN is doing this Well done, taking full advantage of the huge Web 3 user base in Asia. The same geographical location PoW mining, the rise of StepN is also the time when Helium is in its prime, the concept overlaps, user groups can promote each other, Helium users are concentrated in the west, StepN has the eastern market, and the two projects have their own advantages.
The Helium application layer is weak, while the StepN application is strong. For Web 3 project parties, these two must be the most suitable projects for cooperation in the entire market.
Of course, Helium neither imitated Chainlink nor reached a cooperation with StepN to take advantage of the situation. They seem to be less concerned 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 more 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. Migrating Helium 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 developers. Migration to other networks is a high-probability event, but why did you choose Solana, which was greatly affected after the FTX thunderstorm? High performance and scalability?
Because Solana is known for its high throughput and low latency, migrating to Solana may help increase Helium's transaction processing speed, allowing it to 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 Layer 1 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 broaden Helium's cooperation scope and may also help reduce transaction costs on Helium. 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 the shortcomings of its limited application. Solana's security 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 disadvantages. Migrating to the Solana network requires investment of time and resources for technology development, testing and deployment. This may result in increased development costs in the short term, as well as 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.
However, Solana is still a relatively new blockchain platform (compared to Ethereum, etc.), therefore, there may still be certain technical risks, such as potential vulnerabilities, instability or compatibility issues with existing technologies.
Migrating to the Solana network may affect the acceptance of Helium's existing community. Previously, some loyal community members committed to "decentralized wireless networks" may have expressed concerns and opposition to this, which may lead to community splits or user loss .
With many other projects and applications already on the Solana network, Helium may face increased competitive pressure in this ecosystem. 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.
epilogue
epilogue
As Helium has stated before, Helium was not originally an encryption business, but was trying to build long-range, peer-to-peer 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 many opportunities to change the status quo: a large number of professional miners were unable to enter the market, suspected of falsely promoting partners, there was cheating in the exploded system, and the unpopular programming language caused Developers face many difficulties, do not understand that the market has not formed an application ecosystem, and migrate to the public chain most affected by the FTX crash.
The Helium project dabbles in crypto, but doesn't have a deep understanding of crypto (cryptocurrency, users, ecosystems, markets, narratives), and its team isn't entirely part of the crypto 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...
Fortunately, in the 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.
