PulseChain is an upcoming hard fork of the Ethereum blockchain and… Wait. That seems like major news, right? Especially since approximately $700 million has been committed to PulseChain with more than 40,000 participants to get a larger airdrop of the future native token.
Additionally, the PulseChain site claims it will be better than Ethereum. However, many detractors argue it is another scam put on by Richard Heart (aka Richard J Schueler), the man behind the Hex token.
Since you likely have tokens on Ethereum, you will automatically receive tokens on PulseChain from the hard fork. Therefore, whether you have never heard of the upcoming fork, you worship at the Richard Heart alter, or you think it is another elaborate scam from the man, let's dive in, and do a little analysis.
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There is a growing number of voices that are pointing out concerns with the new fork. These arguments tend to be focused on the founder, Richard Heart. They point out issues with the sacrifice phase and some potentially questionable transactions with HEX, Richard’s first crypto project.
The common theme across the concerns is how much money ends up with the founder Richard Heart.
In the summer of 2021, there was a period where users could ‘sacrifice’ ERC20 tokens. Depending on the amount and timing of the sacrifice, you would get a multiplier on the PLS tokens you would receive after the fork. The larger and earlier in the period you sacrificed, the larger the multiplier.
People have questioned what the sacrifice wallet was for and suspect it is just a personal wallet of the founder Richard Heart. Additionally, at the time of the fork, there will be no value to the PLS token. So, users are sacrificing a known value for a valueless token. We were unable to find any indication that the sacrificed tokens were going to be used to provide liquidity or value to the new chain. This has to lead to questions if the sacrifice is just a big payday for Richard himself.
However, note that users could sacrifice to SENS.org, an organization researching ways to fight age-related diseases. Donating to SENS instead of Richard gave 25% less benefit to the user. Even with the slightly lower amount, $25 million was raised for the organization.
The PulseChain sacrifice wallet looks to have nearly $200 million in it. Even more incredibly, the PulseX sacrifice is claiming to have nearly $1 Billion. Yes. This means $1.2 Billion just got sacrificed to what is speculated to be Richard Heart’s personal wallet if these numbers are accurate. Of course, these are just rumors. None of this is proven, and so far, all indications are that PulseChain is a real project in development. It would be a real shame if this were a scam because PulseChain's innovations will revolutionize the entire crypto space.
The PulseChain sacrifice phase rumor is not the only one that has raised suspicion. Even the launch of Hex has long raised suspicions about Richard Heart. Richard Heart's previous project was the Hex Token. It is a highly marketed token that compares itself to an extremely high-yielding certificate of deposits (CDs).
There was a similar 'donation event' at the beginning of the Hex initial coin offering. Users could donate ETH to a wallet and receive HEX tokens. However, they could not swap back HEX for ETH with the same wallet. Again, the suspicion is this wallet is Richard's and he was able to just keep the ETH and exchange a 'valueless' newly minted token.
The origin address was drained of all the ETH months later. Each of the 36 transactions was for 1,337 ETH each. People have pointed out 1337 is old hacker slang for LEET, or 'elite'. This lead to charges of Richard mocking the people he just raised money from.
Additionally, there were charges that Richard was taking ETH from the origin wallet and sending it back through the donation process. This would result in him minting HEX for himself and having the ETH land right back in his wallet. If you take 100 ETH from the donation wallet and send it back to a secondary wallet to donate it again, the end result is your secondary wallets getting airdropped HEX. While you still have all the ETH in the donation wallet.
Anyone who held Bitcoin was also able to claim free HEX and then new users received large bonuses for referring others and bringing them into the ecosystem. This lead to a handful of affiliate-type sites popping up to get new users to purchase HEX and both would get a % of the purchase in bonus HEX.
Airdrops and shilly marketing are fairly parred for the course for many coins trying to grow a user base. That isn't necessarily a huge concern.
However, people have pointed out that for every HEX minted from the BTC claim & the referral program, there was a duplicate minted and sent to the origin wallet.
Basically, the charge is that Richard was minting 50% of all payouts for himself.
Now, as we have just said, this is nothing more than a rumor. On the other hand, the Hex site has an entire page dedicated to debunking the claim it's a scam.
It has a bit of the feel of 'doth protest too much. And unfortunately, only hits on the surface-level complaints. Most of the answers are deflections too. For instance, "It’s unbacked” is answered with a generalized, ‘technically nothing has value except what others are willing to pay for it’ answer.
None of the serious charges about Richard Heart’s huge windfall from Hex is addressed on the page. Nor are the questionable tokenomics mentioned.
Hex’s website claims 40% APR but only a 3.69% inflation rate. With very little revenue coming in from the above 2 fees, the only way this works is if a massive amount of token holders aren’t staking their coins.
Sleuths have estimated Richard’s HEX token ownership to be almost 90% of the total supply. This is based on the origin address allocating similar amounts to 100s of separate addresses. All the HEX in these wallets remains unstaked.
Conveniently, having 90% of the supply unstaked allows the 3.69% inflation to be spread across the remaining 10% of staked tokens creating ~40% APR.
Hex also encourages users to lock up their tokens for longer to receive bonuses. The longest lock-up is 15 years, or basically infinity in crypto terms. Which leads people to say that, this certainly helps with limiting payouts in the near term.
That's not all, even PulseChain's lack of details makes some people think that PulseChain is a scam.
As of now, the majority of what we know of PulseChain is:
- 1. A hard fork of Ethereum.
- We will have a Uniswap-like automated market maker (AMM) called Pulse X.
- There will be the ability to bridge between mainnet ETH and PulseChain.
Details on the new forked chain do seem to be sparse and the ones that are out there seem to be created by the community. (Note- many of the ‘Hexicans’ are driving the PulseChain community sites).
However, many of the community sites don’t seem to have much more details than the heavy marketing that is shown on the Pulse site.
So far, the PulseChain and PulseX launches seem to be mirroring Hex’s launch. Hence, the heavy focus on the concerns that have been raised with Hex.
Despite all the questions raised above, Hex has made a lot of people big money. The coin is up tremendously since its launch.
Regardless of everything above, there is a rabid community of Richard Heart supporters.
PulseChain and PulseX could gain traction and become a successful side chains. There are alternative chains right now that have massive market caps despite not even working and ghost chains out there with a value despite being abandoned. If PulseChain can find support, this hard fork could create value for a lot of people.
However, there seem to be a lot of questions that remain about where the large amounts of money being sacrificed are going and why they are needed.
Now, do you think PulseChain is a scam? Share your thoughts with us in the comments section below. And if you are new to the pulse ecosystem, and want to know more about the pulsechain, hex, or pulse X, we have curated a huge playlist, with all possible questions in peoples minds, it has more than 140 videos as of now. go check them out for more detailed information on this ecosystem, the link is in the description!
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