Why Some Believe PulseChain Is a Scam? In this video, we'll tell you why people believe that PulseChain and PulseX are scams. Of course, before that, we'll try to provide a detailed overview of both projects, highlighting their utility and their earning potential.
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On Jan 10th, the first stage of PulseX’s “sacrifice” ended, bringing total investment into the project to $1 billion and making it one of the largest funding rounds in crypto history.
This comes just 4 months after the half-billion-dollar sacrifice to Pulsechain, a future Ethereum fork on which PulseX is expected to be the main DEX.
However, let's clarify one important point. 
A disclaimer on PulseX’s website reads, “By sacrificing your crypto you do NOT buy PLSX. You can give your crypto away, sacrifice it as a political statement.”
Depending on whether you ask detractors or supporters, this clause is either a loophole to avoid being labeled a security by the SEC, or evidence that it’s the next Bitconnect.
Assuming most of the funds sacrificed were de facto investments made with the expectation of profit, nor came from wallets associated with the team to inflate the project, how did a chain led by Richard Heart, founder of controversial cryptocurrency Hex, become one of the largest crowdfunding campaigns in crypto history?
And, why is discussion almost entirely limited to the Hex community?
This article will explain what some believe Pulsechain and PulseX will do. It will also list the reasons some believe the project is a scam.
Actually, PulseChain is not just an asset you invest in simply to wait for potential future gains. PulseChain solves a major problem that many cryptocurrencies face.
Hundreds of successful DApps have launched on Ethereum but the network’s popularity has made it expensive to use and slow. In 2021, gas fees—the price to validate transactions — occasionally reached hundreds of dollars.
This made developers realize the potential of new Layer 1 chains—like Solana, Binance Smart Chain, and Polygon—that host their own DApps. Some of these chains are not compatible with Ethereum and require bridging solutions to interoperate. Others, like Polygon, are compatible with Ethereum.
For users, the most obvious benefit of using an EVM-compatible chain is that you can swap an ERC-20 token on that DEX, or buy a project token from your chain on an Ethereum DEX-like Uniswap.
When building a Layer 1 chain, developers can theoretically copy the entirety of Ethereum’s code, create a radically different protocol, or, as in the case of BSC, make some improvements to it.
In crypto language, a “fork” of a blockchain means an improved version, with developers making changes to the protocol and its rules. When Ethereum makes upgrades, e.g. the London upgrade, they are called forks as well.
According to founder Richard Heart, Pulsechain will be a fork of Ethereum. The main claims are numerous, such as the 4 times higher throughput, Proof of Stake, Deflationary Mechanism, and much more.
Additionally, all major DApps from Ethereum will also be forked. In other words, the goal is to copy Ethereum and have a built-out ecosystem from the start.
Now let's talk about PulseX.
As the Ethereum ecosystem will be copied over to Pulsechain, PulseX will be the fork of Uniswap. But you probably already knew that. We've talked about this in many other videos.
It is intended to be the main DEX of the Pulsechain ecosystem. For reference, PancakeSwap is also a fork of Uniswap and achieved this analogous function on Binance Smart Chain.
DEXs like SushiSwap and Uniswap have their own governance tokens—SUSHI and UNI, respectively—which grant voting rights to holders. PLSX will be PulseX’s token, and people who sacrificed get a number of “points” based on the size and timing of their contribution. These points correspond to a quantity of PLSX to be airdropped to their wallets once the exchange launches.
Likewise, PLS—PulseChain’s native cryptocurrency—will be airdropped to those who sacrificed for that project.
According to Richard Heart, the price of PLSX and PLS will start at $0 and subsequent price targets are anybody’s guess.
So, as many have mentioned in the comments of our previous videos, PulseX already has a big market cap, and it won't make a lot of X.  Actually, in our opinion, this will not impact the performance of the token. As we just said, according to Richard Heart, the initial price of both tokens will be $0. 
PulseChain is a real revolution in crypto.
It's hard not to see that. If PulseChain is launched under the best conditions, sure: If it meets expectations in terms of speed, cost, and many other things, we don't see why it wouldn't succeed.
In fact, future projects will be launched on PulseChain. However, it is important to make this clear.
Richard Heart has said that the goal of Pulsechain is not to compete with Ethereum but to decrease the burden on the network.
Besides forking Ethereum, the project will also copy the chain’s state. Every wallet will get a match of their ERC-20 tokens on Pulsechain. In other words, it will be a massive airdrop.
For example, if you have 10 eHEX, you will get an additional 10 pHEX on Pulsechain.
However, there is no way to peg the price of the same token on Ethereum and Pulsechain tokens, meaning that the latter may be worthless, or more expensive.
Now let's see why some people believe that Pulse is a scam. But before that, hit the LIKE button, hit the SUBSCRIBE button, and share this video if you haven't already. Keep watching.
The biggest criticism of Pulse and PulseX is that they are directly connected to Hex, a controversial token that has performed well in terms of price but with questionable fundamentals.
According to Richard Heart, Hex aims to be the blockchain’s native certificate of deposit.
Actual certificates of a deposit exist because financial institutions use such deposits to gain returns throughout the market. They can do this because the currency you deposit, e.g. USD has salability and value which can be employed, which banks do after leveraging it. In other words, certificates of deposit work because the bank uses the purchaser's money to create value, namely in the form of loans; the money does not generate value by simply sitting in an account, and the currency's soundness precedes the fact that it can be deposited to earn interest.
In other words, the locking-in mechanism is a necessary but not sufficient condition for CDs, in the traditional sense, to work.
Currently, the high APY that crypto staking earns comes from the tokens facilitating currency swaps on exchanges—a service with very high demand. As it stands, Hex facilitates no service, does not generate value via loans, nor has widespread adoption as a digital currency.
So where does the high annual APY come from? Actually, the high returns are maintained entirely by the purchase of a new Hex that is not staked, which is similar to the classic Ponzi scheme.
Furthermore, scams and Ponzi schemes in the traditional financial market are often cloaked as certificates of deposit as well. CDs that significantly outperform the market tend to attract the attention of regulators, and so-called digital certificates of deposits, especially those that claim to provide too-good-to-be-true returns should be scrutinized heavily.  
The counterargument is that Hex’s smart contract is built to incentivize price stability. The reality is, bitcoin is only as good as its perceived value, and indeed was worth very little until it received widespread adoption as a risky but profitable investment asset. In other words, the desire to get rich pumped bitcoin, and arguments about the soundness of its fundamentals followed.
Eventually, bitcoin might become a widespread currency, but it will have started as a highly speculative asset that was also frequently called a scam.
Hex claims to take the functionality of bitcoin but uses proof-of-stake and adds a staking mechanism that increases returns to those who complete their term, in negative proportion to those who do not. Instead of paying newly minted currency, i.e. the inflation, to miners as with bitcoin, Hex pays the inflation to stakers who provide stability. Ideally, the potential for easy profits will fuel mass adoption, after which an efficient ecosystem can be built upon its fundamentals. Pulsechain and PulseX are supposed to be the initial steps of that ecosystem.
So, we hope that we have been sufficiently explicit and that you have understood our opinion.
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