Fans of Richard Heart awaited the launch of his magnum opus, Pulse, with bated breath. They forgave HEX for languishing 80% below all-time highs — or worse — while they waited. They forgave months of delays, SEC subpoenas, and hundreds of millions of dollars worth of inaccessible funds.
The chart of Heart’s first project HEX illustrates the “sell the news” dump of Pulse. In Wall Street parlance, sophisticated traders buy amid rumors and sell into retail buying on the day of the news — hence the adage, sell the news.
From May 1 through May 22, neither PulseChain (PLS) nor PulseX (PLSX) had any major exchange listing. HEX was the only asset of Richard’s three tokens with liquid, independent price discovery. HEX is therefore the best measure of the value of Heart’s empire.
To that end, consider the price of HEX.
- On May 11, HEX rallied to a 52-week high of $0.08 per token amid rumors of an imminent Pulse mainnet activation.
- Its market capitalization crested at $13 billion.
- By launch time on May 13, HEX had lost one-third of its value to approximately $0.05 per token — just shy of a $10 billion market cap.
Then, on launch day itself, everyone realized the party was over. Smart money had already sold the news. HEX halved within 24 hours to $5 billion. In subsequent days, HEX has continued to sell-off and now trades below $0.02 per token around its 52-week low market cap of $2.2 billion.
Barrage of gas fees and slippage slams HEX fans
The point of Pulsechain (a fork of Ethereum) and its on-chain exchange, PulseX (a fork of Uniswap), was to reduce fees. However, most fees haven’t reduced at all.
Gas fees for a full sequence of transactions using Pulse are prohibitively expensive, with documentation and how-to guides in disarray. Would-be Pulse users need to pay gas fees for:
- Bridging assets onto Pulsechain,
- Activating multiple DEX trading pairs on Pulsechain,
- Swapping non-Pulsechain tokens into Pulsechain tokens (plus MEV and slippage),
- Providing and removing liquidity (plus impermanent loss),
- Trading on Pulsechain (plus MEV and slippage),
- Swapping Pulsechain tokens into bridgeable assets (plus MEV and slippage), and
- Finally, another suite of gas fees for transferring the bridgeable assets back to the original blockchain.
Heart waves away focus from these inundating fees with disingenuous promises about Pulsechain being “150X cheaper” than Ethereum. In reality, most PulseX users are stranded at best or underwater at worst.
Pulse sacrificers: Locked and losing
For instance, consider sacrificers just for PulseX who finally received their mainnet PLSX on May 13. Prior to May 23, there was no exchange for these users to acquire PLS for gas fees to move their PLSX tokens. In actual effect, therefore, all of their funds remain immovable.
Sniffing an opportunity for easy money, an opaque network of over-the-counter dealers set up price-gouging offers, charging users prices like $0.10 for PLS despite its actual value being 99.9% cheaper. Some scammed users out of funds by promising to send PLS in exchange for assets that they simply stole. Faucets tried to give away PLS and immediately depleted amid the chaos.
The public slowly learned the stark reality. The value of HEX and PLSX crashed relentlessly.
Today, PLS has retained some value, but mostly because gas-starved PLSX users have millions of dollars worth of locked funds that require PLS in order to sell. The bid of stranded PLSX users is one of the few sources of PLS demand — and the bid mostly exists so that they can sell.
Fake Pulse and price-gouging OTC dealers
Of course, PLSX users encounter an infuriating sequence of gas fees for each step of their attempts to sell. Consider the above, typical PLSX tokenholder. Prior to May 23, they might have attempted to buy PLS over-the-counter at a rate like $0.10. Even if they bought $200 worth of PLS, they would have received less than $1 worth of PLS after its fair revaluation from $0.10 to $0.0002. Not enough gas even for a single swap.
If the user managed to find a cheaper venue for buying even more PLS, they might have been able to buy a PLS-lookalike — but likely the wrong type. There are dozens of fake versions of PLS. Comically, even the official Pulsechain bridge doesn’t output native PLS. Scores of PLSX users have wasted money trying to buy the wrong type of PLS — or real PLS at price-gouged rates.
Once a dwindling minority of lucky users managed to find enough PLS to conduct all of the on-chain steps required to actually sell their PLSX (see the above barrage of bullet points), they find limited liquidity, massive slippage, and little support.
In short, the patience of Heart’s fans is running thin. His flagship project, HEX, is trading near 52-week lows. Many questions remain regarding his sales of the funds that he raised during the launch of HEX, Pulse, and PulseX. This collateral — mostly ETH and stablecoins — is one of the few things left backing confidence in his schemes.
Selling the collateral but not HEX, Pulse, or PulseX directly
HEX is trading near 52-week lows. PLSX has no major exchange listings. PLS trades on just two exchanges at prices below $0.0002.
In the opinion of Tone Vays, the real source of Richard Heart’s wealth is not any of these three tokens at all. Instead, Vays believes that Richard sells the ETH and other assets raised during the launch of these projects.
“He dumped all the Ethereum that people paid on day one to get his coins,” Vays said.
Heart responded to that claim, “No comment, Tone. I got a lot of really cool stuff. I’m selling something for it, ain’t I?”
Indeed, Richard might never need to sell any meaningful amount of HEX, PLS, or PLSX. If he has sold the ETH, stablecoins, or other collateral backing those tokens, those sales would have made him a multi-millionaire. Even better for his brand, he could honestly claim to have never sold any of his projects’ tokens directly.