CoinMarketCap Academy dives into Pulsechain, one of the most controversial layer-1 blockchains that aims to improve the Ethereum ecosystem.
Pulsechain and its sister project, HEX, are the brainchild of Richard Heart, an internet marketer. They are also some of the most controversial blockchain projects around.
This article will explain:
- What Pulsechain is and how it works.
- Who Richard Heart is.
- The Pulsechain tokenomics.
- The controversy around Pulsechain.
Join us in showcasing the cryptocurrency revolution, one newsletter at a time. Subscribe now to get daily news and market updates right to your inbox, along with our millions of other subscribers (that’s right, millions love us!) — what are you waiting for?
What Is Pulsechain and How Does It Work?
Pulsechain is a layer-1 blockchain created by Richard Heart, the founder of HEX. Pulsechain raised billions of dollars in an initial coin offering (ICO), or what it termed a "sacrifice," to improve upon Ethereum's value proposition. It claims to enrich ETH users by giving them a free copy of their tokens and NFTs on the Pulse network. Pulsechain also claimed to be more environmental-friendly than Ethereum, although that point has been irrelevant since Ethereum’s switch to proof-of-stake.
Pulsechain took a snapshot of the Ethereum system state and replicated it on a new network with some modifications. The new network has a native token called PLS, which can be used to activate validators, pay for transactions, and bridge to other chains. Pulsechain boasted about having a faster block time of 10 seconds instead of 12 seconds on Ethereum.
To get PLS tokens, users had to participate in a sacrifice phase, where they could donate any cryptocurrency or fiat currency to a list of supported addresses or charities. The more they sacrificed, the more PLS they received.
Pulsechain also launched its own decentralized exchange called PulseX, which is similar to Uniswap. PulseX allows users to swap any ERC-20 token or NFT on the Pulse network and also burns a portion of the fees to reduce the supply of PLS over time. It also had its own sacrifice phase, where users could get PLSX tokens by sacrificing PLS or other cryptocurrencies. Both Pulsechain and PusleX saw $11 billion of HEX locked up during the "sacrifice."
Pulsechain is currently live on the mainnet. Users can access Pulsechain by changing their MetaMask settings to connect to the Pulse RPC endpoint. They can also use the PulseScan block explorer to view their balances and transactions on the Pulse network.
Who Is Behind Pulsechain?
The founder of Pulsechain is Richard Heart, an infamous figure in the crypto industry. He claims to be an entrepreneur, author, YouTuber and philanthropist. Richard Heart is also the founder of HEX, an ERC-20 token on Ethereum.
Richard Heart is a self-made millionaire who started his career as an internet marketer. He later moved on to create several successful online businesses, such as a search engine optimization company, a dating website and a Bitcoin hardware wallet. He also wrote a book called SciVive, which teaches people how to live longer and happier lives.
Richard Heart has been a vocal critic of the inefficiencies and limitations of the Ethereum network, which he believes is holding back the innovation and adoption of decentralized applications. He claims Pulsechain is a solution to these problems, as it forks Ethereum to improve its speed and scalability.
Pulsechain Tokenomics
The native token of Pulsechain is PLS, which can be used to activate validators, pay for transactions and bridge to other chains. PLS has a fixed supply of four trillion tokens, which were distributed through a sacrifice phase, where users could donate any cryptocurrency or fiat currency to a list of supported addresses or charities in exchange for PLS tokens. The sacrifice phase ended on August 22, 2021, and raised over $700 million for medical research and other causes.
PLS has some features that aim to make it different from other tokens, such as:
- PLS is deflationary and Pulsechain burns a portion of the transaction fees paid in PLS, reducing the supply of PLS over time.
- Pulsechain implements EIP-1559, which means that every transaction on the network has a base fee that is burned and a tip that goes to the validator.
- PLS is freemium. ETH holders can transact for free with freemium PLS. This means that every ETH address that existed at the time of the fork received a free copy of its ETH balance in PLS on the Pulse network. These freemium PLS can only be used to pay for transactions and cannot be transferred or sold. This allows ETH users to enjoy the benefits of Pulsechain without sacrificing their ETH.
- Pulsechain uses proof-of-stake as its consensus mechanism, which means that users can stake their PLS tokens to activate validators and earn rewards for helping to secure the network. Users need at least 32 million PLS to become a validator, or they can join a staking pool with other users. Validators are randomly selected to propose and attest blocks, and they receive rewards based on their stake and performance.
The Controversy Around Pulsechain
Not everyone is convinced by Pulsechain's promises and benefits. Some critics have accused Pulsechain and its founder of being involved in a ponzi scheme, a pyramid scheme or a pump-and-dump scheme. Below are some of the main arguments against Pulsechain.
Dubious Launch
Pulsechain's launch involved a sacrifice phase. In exchange for PLS tokens, users could donate cryptocurrency or fiat currency to charities that Pulsechain supports. The sacrifice phase raised over $700 million for medical research and other causes. However, some critics argue that the sacrifice phase was a clever way to avoid legal issues and regulations by not offering any guarantees or expectations for the donors. They also claim that the sacrifice phase was a way to enrich Richard Heart and his associates, who could manipulate the supply and demand of PLS tokens.
Buggy Mainnet
Pulsechain's network is not fully functional or secure yet. It is still in beta testing and has faced several technical issues and bugs. For example, on May 24, 2023, the price of wrapped Bitcoin (wBTC) on Pulsechain spiked from $27,000 to $70,000 in just 20 minutes, only to fall back 10 minutes later. This volatility revealed Pulsechain's low liquidity.
Controversial Founder
Pulsechain's founder Richard Heart is one of the most controversial figures in crypto. He has been accused of being involved in a spam-related scheme in 2002, which went to trial.
Doubtful Track Record
Pulsechain's sister project HEX has minimal use cases and value propositions. HEX is designed to be a high-interest blockchain certificate of deposit, where users can stake their tokens for a fixed period of time and earn interest. However, some critics argue that HEX is nothing more than a Ponzi scheme, where the interest payments are funded by new entrants and inflation. They also claim that HEX has no real utility or innovation and it only benefits Richard Heart and his affiliates, who hold a large portion of the supply.
These are some points of controversy around Pulsechain and its founder. Of course, there are also many supporters and fans of Pulsechain who believe in its vision and potential. To them, Pulsechain is a legitimate project that aims to improve Ethereum's performance and user experience while supporting good causes.
Launch Problems
The Pulsechain launch got off to a bumpy start, according to a Protos report. HEX was already plagued with several problems, such as inaccessible funds and SEC subpoenas. That did not discourage fervent HEXicans, but the Pulsechain launch may be yet another low blow to Richard Heart’s grandiose plans.
According to Protos, the May 13 launch was a disappointment due to no major exchange listings, expensive transaction fees and dozens of fake versions of PLS. The report outlines how Pulse sacrificers were bleeding value on their locked tokens while not being able to bridge away from the chain. Meanwhile, over-the-counter dealers charged excessive prices for dumping locked tokens.
The article speculates that the situation may not impact Richard Heart’s wealth, as he is rumored to have made a fortune on the raised ETH alone. In response to rumors of him selling the raised ETH, the article quotes Heart:
“No comment, Tone. I got a lot of really cool stuff. I’m selling something for it, ain’t I?”
Conclusion
Pulsechain is a controversial project with a large following and a great number of doubters. The former claim that Pulsechain will revolutionize decentralized applications while the latter consider it a scam. Users that want to invest in Pulsechain should treat it with caution and DYOR.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
