[Thread] A look at Helium, a network of 500K+ crypto mining hotspots, which raised $365M from a16z and others and generates an estimated $6.5K/month in revenue
.@Helium, often cited as one of the best examples of a Web3 use case, has received $365M of investment led by @a16z. Regular folks have also been convinced to spend $250M buying hotspot nodes, in hopes of earning passive income. The result? Helium's total revenue is $6.5k/month https://twitter.com/... Tweets: @liron , @liron , @liron , @aaronhuertas , @dancow , @bshivarthy , @kylesamani , @thestalwart , @btc_jacksparrow , @thestalwart , @terenceleejx , @can , @coloradotravis , @nvk , @justinhendrix , @thestalwart , and @liron Tweets: Liron Shapira / @liron : I've posed the question to the @a16z partner involved with Axie Infinity, “how does money flow into the system?” He blocked me. The tech community deserves better. Let's continue to press for answers to simple questions about Web3's money flows and use cases. https://twitter.com/... Liron Shapira / @liron : These folks maintain false hope of positive ROI. They still don't realize their share of data-usage revenue isn't actually $20/month; it's $0.01/month. The other $19.99 is a temporary subsidy from investment in growing the network, and speculation on the value of the $HNT token. https://twitter.com/... Liron Shapira / @liron : .@cdixon's “mental model” thread on Helium claims that this kind of network can't be built in Web2 because it requires token incentives. But the facts indicate Web2 *won't* incentivize Helium because demand is low. Even with a network of 500k hotspots, revenue is nonexistent. https://twitter.com/... Aaron Huertas / @aaronhuertas : Attempting to build what should be public infrastructure by convincing customers to buy wifi hotspots and do free labor. https://twitter.com/... Dan Nguyen / @dancow : lmao my web3-costco card makes more than that in rental income https://twitter.com/... Bhargav Shivarthy / @bshivarthy : Decentralization and It's Discontents. https://twitter.com/... Composability Kyle / @kylesamani : @TheStalwart I don't dispute the numbers Lead time for IOT customers is very long. Was hard to take Helium IOT network seriously until 6 months ago Network Testing + upgrading hardware + updating services portals + shipping takes 6-12 months Joe Weisenthal / @thestalwart : Curious what @KyleSamani and others say in response to this and if the numbers accurate. https://twitter.com/... @btc_jacksparrow : We never learn https://twitter.com/... https://twitter.com/... Joe Weisenthal / @thestalwart : As @liron notes, if you look at the Helium subreddit, there's tons of folks who have put up hundreds or more upfront, now getting like a few pennies a day https://www.reddit.com/... (Note that coins that don't have a ‘point’ don't have this problem) Terence Lee / @terenceleejx : Good critique of a supposedly promising web3 project, @helium. Seems like actual revenue from actual customer usage is tiny. https://twitter.com/... @can : makes u wonder about the various companies built on this helium network 🤔 https://twitter.com/... @coloradotravis : Another elementary analysis failure. You invested a third of a billion in some weird makerlab gig economy of downstream users all riding on a gigacorp backhaul. The backhaul is the business. This is like investing in a yard sale and calling it “the marketplace of the future.” https://twitter.com/... @nvk : Helium is a scam, the devices need the internet to validate their tokens in order to participate in the radio network negating the point of the radio network 😆 It's the equivalent to running toasters in order to cool beer. https://twitter.com/... Justin Hendrix / @justinhendrix : Another Web3 use case- led by A16z- turns out to be... a scam. https://twitter.com/... Joe Weisenthal / @thestalwart : I'm still blown away by this thread. Unreal gap (between the value of this token) and the existing revenue run rate. And also bear in mind that Helium is one of the quintessential “cryptos that actually does something” like in that thread the other day. https://twitter.com/... Liron Shapira / @liron : Members of the r/helium subreddit have been increasingly vocal about seeing poor Helium returns. On average, they spent $400-800 to buy a hotspot. They were expecting $100/month, enough to recoup their costs and enjoy passive income. Then their earnings dropped to only $20/mo. https://twitter.com/...
Context & Ripple Effects
Helium has spent three years as the poster child for Web3 infrastructure: the $495 mining hotspots launched in 2019 promised a city-scale peer-to-peer network, and by February the project had raised a $200M Series D at a $1.2B valuation with 500K+ hotspots deployed.
The thread's core finding collapses the gap between capital raised and value created: $365M from a16z and others, $250M spent by retail buyers on nodes, against roughly $6.5K/month in total network revenue. Days later, the Lime cease-and-desist showed a flagship client claim was, per Lime, false — compounding questions about what demand actually exists.
First-order effects
- Hotspot operators who paid for nodes expecting passive income are exposed: with ~$6.5K/month spread across 500K+ hotspots, per-node returns are near zero, and the $250M they collectively spent is the sunk cost.
- a16z's flagship 'best Web3 use case' becomes its most citable counterexample, and the reported blocking of Liron Shapira after questioning money flows puts the firm's promotional role directly in the thread's spotlight.
Second-order effects
- Every other token-incentivized network that cites Helium as proof of the model now faces the same revenue-versus-valuation audit from skeptics, and the VICE 'collective Theranos' framing gives critics a ready-made template for the whole category.
- Helium's demand story rests on IoT client adoption it can't currently document — the Lime dispute suggests prospective enterprise customers will face heightened diligence on whether named 'clients' are real.
Third-order effects
- If the pattern holds, token-mined infrastructure gets repriced around actual usage revenue rather than token appreciation, forcing hardware-subsidized networks to find paying customers or shrink — and shifting retail 'passive income' node sales toward the scrutiny reserved for unregistered securities.
- The credibility of crypto VC deal flow is the deeper casualty: when a $1.2B-valuation project's revenue is four orders of magnitude below its raise, limited partners and regulators gain their clearest case study yet for the 'collective Theranos' critique of Web3.
The trend: Crypto infrastructure networks are being re-audited on real revenue rather than token-driven valuations, with Helium as the test case for whether token-incentivized hardware can ever find paying demand.