Xunlei's Blockchain Dead End: Withdrawal from Wanke Cloud, CEO Exits
TechFlow Selected TechFlow Selected
Xunlei's Blockchain Dead End: Withdrawal from Wanke Cloud, CEO Exits
This object, blending the meaning of decentralization and the spirit of sharing, turned into a "sterilized old hen," exiled along with its inventor.
Navigating Web3 tides with focused insightsOn October 8, Xunlei issued an announcement stating that Chen Lei, former CEO of Xunlei, and others are suspected of embezzlement and have been investigated by the Shenzhen Public Security Bureau.
Xunlei's announcement pointed out that Chen Lei is suspected of misappropriating tens of millions of company funds to trade cryptocurrencies and arranging relatives to fabricate contracts within the company to siphon off corporate funds.
To many Xunlei employees, the act of using tens of millions for cryptocurrency speculation is inseparable from LinkToken (WanKuYun). This invention, now exactly three years old, once drove Xunlei’s stock price up sixfold, witnessed internal conflicts between the company’s CEO and founding team, and was widely imitated by other internet companies.
Today, this object blending decentralization and the spirit of sharing has become a “sterilized old hen,” exiled along with its creator.
Indeed, as the saying goes, it rose rapidly and fell suddenly. Both WanKuYun and its founder have experienced within three years the entire cycle of being celebrated, neglected, and then swiftly discarded.
The Sterilized Old Hen That Once Multiplied Xunlei’s Stock Price Sixfold
No one expected that the once-hot egg-laying hen would become a sterilized old hen.
"It can't mine nor let the hard drive sleep—so disgusting," said Hu Xing, a LinkToken (WanKuYun) user. He explained that a "sterilized old hen" refers to a WanKuYun device with mining disabled, usable only for downloads—an utterly useless piece of hardware.
Currently, mining profits from WanKuYun no longer cover electricity costs. "Mining on WanKuYun frequently reads the disk; veterans say it damages hard drives, so most users choose to sterilize it."
"Sterilized WanKuYun units (50 yuan) are 20 yuan more expensive than non-sterilized ones," Hu Xing remarked sarcastically.
Go back to October 2017, when the digital asset wasn’t called LinkToken but rather WanKeBi. "Hen and egg"—this was the nickname users gave to "WanKuYun" and its generated digital asset "WanKeBi."
In August 2017, Chen Lei introduced WanKuYun, inspired by Bitcoin's POW algorithm, generating a digital asset called WanKeBi through "mining." The total supply was capped at 1.5 billion, halving every 365 days, with annual mining output decreasing by half each year.
This was a combination of shared CDN (Content Delivery Network) and personal cloud storage devices. Xunlei itself was already a CDN provider and had launched the Thunder Earning Device in June 2015, marketed as "a device that earns money." At that time, Xunlei directly subsidized cash to encourage users to share CDN resources, effectively paying to acquire bandwidth resources.
Two months later, on October 31, 2017, WanKuYun was officially released. Chen Lei announced opening shared computing services to all individual users, officially launching "cloud mining" and the WanKe Rewards Program. WanKeBi could be used across Xunlei's ecosystem to exchange for over 200 premium services such as expanded storage space and Xunlei membership.
At the time, blockchain concepts were extremely popular, and WanKeBi prices skyrocketed. On some trading platforms, WanKeBi surged from an unofficial issue price of 0.1 yuan to 9 yuan—an increase of 90 times.
WanKuYun was seen as a mining rig, with prices soaring from 338 yuan to a peak of 3,240 yuan. WanKuYun also caused Xunlei’s stock price to rise fivefold in just one month—going from $4.28 in October 2017 to $24.91, peaking briefly at $27.
"WanKuYun, priced at 599, you earn 1,500 just by grabbing one," said a player. Early participants in the WanKuYun Taobao crowdfunding campaign used抢dan software or hired interns to hoard large quantities, allowing these miners to earn their first fortune in 2017. Some individuals participating in the WanKe Rewards Program earned over ten WanKeBi daily through mining—"breaking even in just a few days."
WanKuYun also brought enormous revenue to Xunlei. "Our WanKuYun device once generated over 100 million yuan in daily turnover," said a Xunlei employee.
According to statistics, over 30 million WanKuYun units were sold, and Xunlei integrated more than 1.5 million shared nodes. At the time, LinkToken not only allowed trading on third-party platforms but also supported over-the-counter transactions, forming a secondary market.
Under such incentives, significant risks emerged, especially for U.S.-listed companies like Xunlei.
As early as November 28, 2017, Shenzhen Xunlei Big Data Information Services Co., Ltd. publicly criticized Xunlei CEO Chen Lei for conducting unauthorized WanKuYun activities without using any blockchain technology, calling it an illegal exchange and disguised ICO.
Xunlei did not provide a clear response. On December 9, 2017, WanKeBi was renamed LinkToken.
However, as participation grew, mining efficiency declined. In January 2018, the Internet Finance Association of China issued a risk alert, stating that virtual digital assets like LinkToken issued via IMO models were essentially financing behaviors and disguised ICOs.
"WanKuYun claims to mine using idle bandwidth, but in reality, it's basically Bitcoin mining," Hu Xing told TechFlow, noting that most buyers treated WanKuYun as mining rigs.
On the night the Internet Finance Association named them, Xunlei’s stock plunged 27.38% at market open, and LinkToken prices dropped sharply.
On January 16 and 17, 2018, Xunlei successively posted announcements on its official website, declaring that LinkToken would return entirely to its role as an internal points system within the Xunlei ecosystem. Starting January 31, LinkToken could only be used in applications and services provided by Xunlei and its partners, aiming to clear suspicions of ICO involvement.
Following Xunlei’s announcement, LinkToken prices halved from 4 yuan to 2.5 yuan. Due to regulatory scrutiny, searching for "WanKuYun" on platforms like Xianyu resulted in warnings about violating content policies, leading sellers to refer to the hardware using abbreviations like "wky" or "hen."
On September 17, 2018, Xunlei announced selling its blockchain-related businesses—including LinkToken, LinkToken Mall, and LinkToken Pocket—to Newland Technology Group.
By the end of 2018, the official price of WanKuYun was 599 yuan, but on secondhand markets, numerous units were resold at prices as low as 40 yuan. The huge gap between official and secondhand prices made the WanKuYun model unsustainable.
Now, searching online for "WanKuYun" reveals widespread investor complaints. "WanKuYun is the worst purchase I've made in five years," said a user on Weibo, adding that before mining ended, WanKuYun's download speed was already "like Baidu Cloud without a paid membership."
On October 12, LinkToken was priced at 0.125 yuan, down 98.6% from its peak.
Chen Lei’s Five Years at Xunlei
Perhaps the rise and fall of WanKuYun mirrors that of its co-creator, Chen Lei.
According to official records, at the end of 2014, to expand its B2B business, Xunlei established Wangxin Technology and recruited Chen Lei from Tencent Cloud as co-CEO. In June 2017, Chen Lei was formally appointed CEO of Xunlei. In the following six months, founders stepped down, the CFO resigned, and vice presidents were dismissed. With support from major shareholder Xiaomi, Chen Lei led Xunlei into an "All-in Blockchain" era.
"Xunlei is fundamentally a decentralized internet company rooted in P2P technology. Genetically speaking, Xunlei has a better chance than others in shared computing," Chen Lei once said. Unlike other companies taking a B2C path, Xunlei aimed to leverage blockchain technology to forge a unique C2B route.
Under Chen Lei’s leadership, the blockchain version of the Thunder Earning Device—"WanKuYun"—was born.
Six months after launching WanKuYun, Xunlei Chain emerged, reportedly capable of handling one million TPS, meeting demands for large-scale commercial applications.
Thus, Xunlei transitioned from a download software company to a blockchain firm, transforming overnight into a blockchain概念股. All of this was driven by Chen Lei.
"Xunlei is a global pioneer in shared computing and blockchain, and a Chinese innovative enterprise in distributed computing with core technologies," proudly declares the current homepage of Xunlei.
Last October 24, discussions around blockchain technology development trends boosted Xunlei, labeled a "blockchain概念股," which surged 107.8%, marking its largest single-day gain since listing.
Xunlei’s foundation as a blockchain company rested on WanKuYun. After WanKuYun faded in 2018, Xunlei failed to fill the performance gap with other blockchain ventures.
According to Xunlei’s Q4 2017 financial report, total revenue increased 128.5% year-on-year to $82.4 million, with cloud computing revenue rising 517.2% and gross profit increasing 149.8% quarter-on-quarter, fueled significantly by WanKuYun and Xingyu CDN.
In 2018, Xunlei achieved its highest annual revenue of $230 million. By 2019, however, revenue began shrinking to $180 million.
Xunlei’s 2019 annual report showed that revenue from cloud computing and other internet value-added services under Chen Lei’s responsibility reached $84.1 million, down 31.3% year-on-year; subscription service revenue was $81.5 million, down 0.4%; and online advertising revenue was $15.6 million, down 43.7%.
The brilliance brought by cloud computing and blockchain to Xunlei was brief. Declining data may have been one trigger for Chen Lei’s ousting.
According to reports, starting in the second half of 2018, some employees began questioning Chen Lei. Employees recalled a shift in company culture—no standout achievements, unrecognized work, and shrinking operations.
"Blockchain’s rise hasn’t delivered real returns to Xunlei. Wangxin is more important; many Xunlei businesses have paused or gone silent," said a Xunlei employee.
When Chen Lei first joined Xunlei, he nominally served as CTO but focused primarily on Wangxin Technology, overseeing CDN and blockchain businesses. Products like the Earning Device and WanKuYun were his key initiatives.
"LinkToken is the most crucial part of the PCDN (P2P Content Delivery Network) ecosystem. Enhancing LinkToken’s value is commendable; once someone leaves, it becomes mere coin speculation," said a Xunlei employee on Maimai.
On April 2 this year, a group of white-clad security guards stormed into the office and seized control of Wangxin Company, removing Chen Lei and his executive team.
"I might have committed many taboos typical of professional managers and offended some people," Chen Lei reflected on his experience at Xunlei. He repeatedly stated that Xunlei was deeply entrenched in systemic problems.
In November 2017, shortly after becoming CEO, Chen Lei, concerned that P2P operations under the affiliated Xunlei Big Data would harm the Xunlei platform, issued an official statement clarifying the relationship with Xunlei Big Data Company.
Xunlei Big Data (later renamed Shenzhen Mojindog Information Services Co., Ltd.) represented the interests of Xunlei’s senior vice president Yu Fei and other founding team members. As a professional manager without equity, Chen Lei held no advantage, planting the seeds of future conflict.
Tang Jun, former president at Shanda, once remarked, "There's a difference between professional managers and entrepreneurs: the former always balance company interest against personal interest; the latter always place themselves within the company's interest." "Obedience is the first duty of a professional manager."
The decline of WanKuYun, falling data, encroaching on veteran employees’ interests—step by step, Chen Lei was completely ousted, fleeing overseas.
After Chen Lei’s departure, the founding team led by Li Jinbo, Xunlei’s former technical head, began purging Chen Lei’s team.
Chen Lei revealed that within just over a month, nearly 200 Wangxin employees were laid off—out of a total workforce of about 400.
According to leaks on Maimai’s anonymous forum, after Chen Lei left, top management lost confidence and cut all blockchain operations, including laying off recent graduates who had worked less than a year.
With Chen Lei gone, the blockchain DNA he implanted slowly drained from Xunlei. Without blockchain, what remains of Xunlei?
Xunlei’s Discarded Pawn
Of the three video giants from a decade ago—Kuaibo, Xunlei, and Baofeng Video—only Xunlei still drifts amid storms today.
After multiple website crashes, the arrest of its actual controller, and the resignation of all executives, Baofeng Group finally entered delisting procedures on September 21, with its stock abbreviation changed to "Baofeng退."
Once rivals to Xunlei—Net Transporter, QQ旋风, BitComet, and others—have all disappeared, leaving Xunlei as the last survivor. "Give Xunlei another five years, I believe it can reach Tencent’s scale," founder Zou Shenglong once confidently declared after fending off QQ旋风’s assault.
But now, with the rise of video-on-demand models and cloud storage popularity, Xunlei’s download business has steadily declined.
According to Xunlei’s Q1 financial report, the number of users dropped to 3.9 million, losing 700,000 users. Previously, Xunlei’s peak membership count was 5.1 million in 2013.
Some Xunlei users complained, "Download speeds are unbearable without a membership—it forces you to subscribe," and noted the addition of completely useless features.
Others explained that a significant portion of Xunlei’s downloads involved pirated or pornographic content. As copyright laws improved and national clean-up campaigns intensified, relevant websites dwindled, reducing Xunlei’s traffic.
Chen Lei also suggested gradually phasing out Xunlei’s download business: "At one point, our total litigation exposure exceeded 100 million RMB, with payouts reaching over 70 million RMB in 2017. This business brings diminishing value to Xunlei—its actual profit was only around 70 million RMB annually," plus massive legal risks.
Chen Lei’s proposal was ignored by Xunlei’s board. Prioritizing blockchain over download services became another main reason for his removal.
Can Xunlei overcome its chronic issues after Chen Lei’s departure?
Cloud storage services like Baidu Netdisk and Huawei Cloud, alongside video-on-demand platforms "Youku, iQiyi, Tencent Video," have steadily eroded Xunlei’s market space. It is reported that Alibaba Cloud Drive has recently entered beta testing.
Xunlei is gradually entering a dilemma. Without Chen Lei’s intervention, Xunlei might have already followed the paths of Baofeng and Kuailu. Yet, the "WanKuYun" model pioneered by Chen Lei was quickly copied by other internet companies.
After WanKuYun, Xunlei launched Earning Device Pro in early 2019, mining crystals redeemable for RMB—but it gained little traction.
But the "idle bandwidth mining" model of WanKuYun was rapidly imitated, sparking a NAS (Network-Attached Storage) trend.
Besides Xunlei’s Earning Device, products like Baofeng Boke Cloud, JD Wireless Treasure, Phicomm N1, and Youku Router Treasure were dubbed "mining vehicles" in the online earning community.
Unlike WanKuYun, JD Wireless Treasure clearly distanced itself from blockchain and coin mining from the start, issuing risk warnings.
"Its practical use is exactly what we understand as a mining rig," said players. The mined JingDong beans are equivalent to cash (10 beans = 0.1 yuan) and can be spent on JD.com. The JD Wireless Treasure (Accelerated Edition) comes with 128GB built-in storage used for mining, i.e., sharing upload bandwidth.
Yet, the core competitiveness of these "mining vehicles" lies not in "issuing tokens" or easily replicable "idle mining," but in sales channels, content richness—areas where Xunlei clearly lacks strength.
What remains of the blockchain概念股 if you remove WanKuYun?
According to its official website, Xunlei’s blockchain business includes three segments: Wangxin Cloud, Xunlei Chain, and Xingyu Cloud. Wangxin Cloud and Xingyu Cloud serve distributed CDN, primarily through Earning Device Pro, while Xunlei Chain provides smart contract development and blockchain application deployment services, competing directly with Ant Chain and Tencent Blockchain without notable differentiation.
According to a Yahoo Finance report from October last year, Xunlei planned to raise a $100 million private fund overseas, investing primarily in innovative blockchain technologies, blockchain business models, and digital assets.
A year later, however, this private fund remains unseen by the public. After shedding parts of its blockchain operations, Xunlei is unlikely to achieve significant progress in blockchain in the short term.
Recently, users discovered that WanKuYun (LinkToken) suffers from a bug where the hard drive cannot be found on mobile clients but remains readable on computers. Official forums contain page after page of similar help requests, yet none have received responses from the company.
"LinkToken—Xunlei and Newland staged a great show together. Who will take responsibility for LinkToken and WanKuYun?" someone protested on the WanKuYun Baidu Tieba. As early as September 17, 2018, Xunlei announced selling its blockchain businesses—including LinkToken, LinkToken Mall, and LinkToken Pocket—to Newland Technology Group.
"(WanKuYun) has been abandoned," commented one user beneath the post. Now, like its creator, WanKuYun has become Xunlei’s discarded pawn.
*TechFlow reminds investors to beware of high-risk investments. The views expressed herein do not constitute investment advice.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
