Helium Lied about it’s Partners, Salesforce and Lime are out

Helium had listed Salesforce and Lime about partners—these two companies said they are not in partnership. All while Helium’s revenue decline to $6.5k/month.

Helium Lied about it's Partners, Salesforce and Lime are out; Revenue Worries
Helium Founders Trying to Inject Credibility

Helium is in trouble this week after multiple companies said they were listed as use cases on Helium’s site, even though they were not using Helium. Helium is a blockchain project that works as a decentralized, user-powered wireless network. It’s like a mesh net competitor to typical internet providers which incentivizes users to run nodes providing network availability via their HNT token.

The recent scandal for Helium came when both Salesforce and Lime, companies whose icons were listed under Helium’s active partners section, said they had no current relationships with Helium. Lime said they had taken part in an initial test back in 2019, but Salesforce simply said they didn’t have any partnership.

In response, Heliums CEO Amir Haleem put out a series of tweets explaining the shape some of these partnerships take which may have led Helium to misunderstand the current state of their relationships with these companies.  “We’ve worked with companies big and small over the years. Lots of these engagements are pilots and trials, sometimes they turn into bigger applications and sometimes they don’t. […] Some of the users on the network we know about and some we don’t, that’s the nature of having a permissionless network that anyone can use. “

Haleem’s stance was that he received verbal approval for this type of marketing, but with people constantly changing roles, verbal approval was no longer enough. Haleem said they would no longer list companies that haven’t given written approval–the company removed only Lime and Salesforce. In my view, it’s hard to imagine that Helium just didn’t realize the two largest companies they touted as partners weren’t using their network.

Is Helium a Good Investment?

Helium has raised $365M with top venture capital firm a16z as the lead investor, and an estimated $250M has been spent by retail investors on hotspot nodes. Most of those nodes were purchased for hundreds to thousands of dollars, at a time when node operators were making roughly $100/month. That’s changed.

Now, the average node makes about $20/month, and some users are reporting far lower earnings. If you go to Helium’s subreddit, you’ll find an endless stream of people posting about rates being cut, and some recently saying they’re not earning any rewards.

That’s just the current state of the network. Within the next 12 months the rewards will be cut in half again, and there are a number of backordered miners that will be coming online as orders are fulfilled. That means node operator rewards likely are only going down from here.

Outside of obscure DeFi projects, it’s rare that I see a project with worse economics than Helium. With all of this money spent, Helium has managed to generate a whopping $6,500 a month in revenue. The payout to node operators is a combination of subsidies by venture capital investor money and dilutive minting of the underlying token, like so many crypto project rewards are.

Many of the details for this article were based on Liron Shapira’s Twitter thread breaking down Helium’s financials.