HNT Drops amidst Backlash Over Controversial Helium v3 Proposal

Coinspeaker
HNT Drops amidst Backlash Over Controversial Helium v3 Proposal

After weeks of steady gains, Helium’s native token, HNT HNT $7.18 24h volatility: 7.3% Market cap: $1.22 B Vol. 24h: $27.02 M , has taken a sharp turn downward, falling nearly 15% over the past week.

The primary factor behind HNT’s decline is growing unrest within the Helium community over the newly proposed Helium v3 upgrade.

The Helium v3 proposal was recently introduced via the project’s official X (formerly Twitter) account. The upgrade aims to revamp Helium’s economic model and improve scalability, making it easier for new participants to join the decentralized wireless infrastructure network.

However, the proposal’s bid to increase the maximum supply of HNT tokens has sparked community backlash. Under the new model, Helium would mint 5 million HNT tokens in a one-time event, allowing for the redemption of Helium Subnet Tokens (HST) after one year. Additionally, the new structure would allow the network to emit 10 million HNT annually, split evenly across its subnetworks. If the proposal is approved as it stands, HNT’s total supply would rise from 223 million to 238 million, marking a 7% increase.

This potential increase in supply has raised concerns within the community, with many fearing that the move could dilute the token’s value. “I love the ideas! [But] this part I highlighted is concerning: how can anyone propose changing the maximum future supply of HNT? It should be fixed forever at 230 million,” commented one user, reflecting the sentiments of many who see the proposal as a risk to the token’s stability.

The timing of this controversy could not be worse for HNT. While the broader market enjoys an upswing, HNT has bucked the trend, suffering a steep decline. The token’s price dropped to $6.52, its lowest point this month. This is a significant fall from its multi-month high of over $8, which it reached earlier due to the rising interest in the decentralized physical infrastructure network (DePIN) sector.

The technical indicators also show bearish signs for HNT. The Relative Strength Index (RSI) has been steadily dropping, indicating weakening momentum. Currently, the RSI sits at 41, which is not yet in the oversold territory, but still points to ongoing selling pressure. If the downtrend continues, the $6 price level could act as the next key support. If this level breaks, analysts predict that HNT could fall to $5.47, undoing the progress it made since mid-July.

While the Helium v3 proposal is still in its early stages and may undergo revisions based on community feedback, the current uncertainty has already shifted market sentiment. Many traders are now taking short positions on HNT, expecting further price drops. For now, the Helium team will need to address the concerns of its community if it hopes to restore confidence and stabilize HNT’s market performance.next

HNT Drops amidst Backlash Over Controversial Helium v3 Proposal