NEM Foundation, Nearly Broke, Plans Layoffs and Pivot


via cd

The NEM Foundation, a community-funded nonprofit established to promote the NEM blockchain, is planning layoffs across its entire 150-person staff in the wake of severe budget cuts and ahead of an imminent restructuring, CoinDesk has learned.

The newly elected president of the NEM Foundation, Alex Tinsman, told CoinDesk Wednesday the Singapore-based NEM Foundation now intends to submit a funding request to the NEM community fund for 160 million tokens (worth roughly $7.5 million), money that would be used to rescue the organization.

NEM tokens are listed under the XEM ticker with a circulating supply of 9 billion, according to CoinMarketCap. At press time, XEM is the world’s 18th largest cryptocurrency by market capitalization.

“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council,” Tinsman, who took over the non-profit in January, said in an interview.

As a result, the foundation’s 202 members – people who undergo identity checks and pay an annual $50 membership fee – will be asked to vote on the funding request in February after it’s published on Thursday. The number of layoffs will be determined by how much funding the community approves, Tinsman said.

NEM’s XEM token launched in 2015 under the guidance of former foundation president Lon Wong. The cryptocurrency is primarily used for transaction and service fees on the NEM blockchain. The full launch of the platform’s native engine software, called Catapult, is scheduled for later this year. In the meantime, NEM pilot projects have often focused on use cases such as voting.

Indeed, Tinsman herself was elected in a process that used NEM’s platform.

Tinsman said the foundation spent roughly 80 million XEM between December 2017 and January 2019, primarily on marketing. (Wong did not respond to requests for comment about the foundation’s spending.)

“We’ve reduced marketing activities because it doesn’t make sense to market a product [Catapult] that isn’t out yet,” Tinsman said.

According to a longtime NEM user, a developer who asked to stay anonymous because he worked directly with departed leadership, Wong faltered when he used his visibility at the foundation to promote “sketchy” initial coin offerings such as Ecobit and ProximaX.

The ProximaX token sale reportedly raised more than $33 million in 2018 and the company’s websitelists Wong as the CEO. The anonymous developer said “the community felt this was a breach of faith,” adding there is still a great deal of work to be done in order to encourage developers like himself to actually use the blockchain.

“There’s not a whole lot of people working on this platform. Even though it’s easy, the community isn’t really there unless you go to Japan,” the developer said. “We need more developer traction on this platform.”

Tinsman, a former communications executive at the foundation before 148 registered members elected her to lead the nonprofit, is embarking on a much more disciplined roadmap for 2019.

She said teams will be given specific budgets and required to perform more open-source documentation of their progress making tools for the NEM ecosystem.

“The community will also be voting on these [funding requests] and which ones we should be moving forward with,” she said.

Tinsman further plans to monetize the foundation’s activities in 2019, including enterprise training and affiliate marketing, to reduce the nonprofit’s reliance on community grants.

She described the restructuring as a “positive step,” adding:

“It’s really exciting to me that NEM has a strong suite of tools and a community that is moving forward to change the future. And now we can support them in meaningful ways.”

NEM conference booth image via the NEM Foundation.

UPDATE (31, January 15:00 UTCB): The headline for this article has been updated to more accurately describe the NEM Foundation’s financial situation. It is running low on cash, but that does not necessarily mean it will seek bankruptcy protection from creditors.

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https://cryptomenow.com/major-cryptocurrency-project-nem-only-has-a-month-of-runway-left/

We’ve heard about exchanges and crypto projects cutting staff, and to some extent, we all assumed the sh*t projects would be going down under these testing conditions. But NEM, a somewhat underrated project, has announced it’s running out of funding.

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https://hacked.com/crypto-winters-first-victim-nem-foundation-crumbles-as-xem-coin-price-sinks/

The crypto winter may just have claimed its first major victim as the NEM Foundation announced it would be suspending all projects and partnerships due to the tumbling XEM coin price.

Despite organizational restructuring, and an agreement to cut its budget by 60%, the foundation admits to having enough funds to operate for just one more month.

Within hours of the announcement on Thursday the XEM coin price sunk to a new 22-month low in the low four cent range – a 97.9% reduction since the ATH; although new lows were being struck all throughout December and January.

Several crypto enthusiasts and NEM followers have questioned the wisdom of leaving it until thirty days before possible destruction to break this news. While some are already screaming ‘Exit Scam!’, the foundation, headed by newly appointed president, Alexandra Tinsman, says it will be working hard to ensure the longevity of the NEM community.

Crypto Winter Tests Logic

As announced by the team on the NEM forum:

“In terms of running an effective organization, the existing structure failed. Maybe that didn’t seem like a big problem when the XEM price was high, but it’s a very big problem as we seek to sustain a viable organization in the ‘Crypto Winter.’”

As suggested in my recent article, ‘5 Things Crypto and Blockchain Investors Should Beware of in 2019’, many of the incentive structures put in place at the height of the bull market are going to be severely tested here in the bear.

Admittedly I was referring to block producer and miner rewards, but the NEM news also brings to light the crazy spending being carried out by the community groups who develop and push these cryptocurrencies. More from the announcement:

“The reality of having one month left in funding means we won’t be able to support our current headcount, partnerships, and projects. We need to put everything on hold. This is painful since it hurts good people and partners.”

Excessive Spending

The NEM Foundation board was recently radically restructured, and the new board members say they cannot apologise for the irresponsible behaviour of previous stewards. However, they admit that spending reached as high as 9 million XEM per month. That would have been worth close to $0.75 million in December, and $1.5 million per month back in July.

“We saw a lot of talented people who were working hard, but not aligned with the same goals. We saw efforts being duplicated, and inconsistent metrics of success. We saw very little accountability for funds and questionable ROI, leading to a burn rate of 9 million XEM per month.”

Exit Scam?

Cynicism was abound on Thursday, with one Redditor commenting:

“Wow so they decided to tell everyone when there’s only a month left of funding. They knew their burn rate but kept it till the last minute. #ExitScam.”

New president Alexandra Tinsman has reportedly submitted a community request to the foundation for XEM funds equating to a dollar value of $7.5 million. It is said that these funds will be used to save the foundation from the edge of bankruptcy. (NOTE: This news was reported via prominent news outlets, but was notably absent from today’s internal forum announcement).

Unfortunately, if an exit scam is in the works, it may be difficult to tell it apart from the general sell-off. By Thursday morning XEM was dropping like a stone, while trade volume rose to its highest in almost three months.

NEM Price – XEM/USD

XEM was down over 9.9% by Thursday morning, falling from $0.048040 down to $0.043284 – a new 22-month low that stretches back to April of 2017.

That’s a crazy drop for a coin which once appeared to be one of the major players, and maybe even a possible ‘Ethereum Killer’. Just one year ago, NEM was valued at a market cap of $18.8 billion. Yes, billion. Today, that cap is closer to $400 million, and a coin that once contended for a top ten spot is now close to slipping out of the top twenty.

Perhaps worryingly, only around 7% of daily trades came against USDT, with traders instead apparently opting to cash out for BTC, ETH and JPY.

So… Is NEM Finished?

Not right now anyway, but losing the beating heart of the coin’s community cannot be a good sign. Just think of all the Dash news we’ve heard in the past year, then consider how much of that would never have reached our ears if it weren’t for the community payouts which incentivize people to actually get out and do things.

The foundation ended their glum announcement with a positive look to the future, and a reference to the upcoming launch of Catapult – a new blockchain ‘engine’ that they say will eventually replace the current core NEM engine:

“We are optimistic about the future of the NEM Foundation under its new council. With a laser-focus on our mission-critical goals, we are positioned to remain an industry leader through this ‘Crypto Winter.’ The upcoming launch of Catapult will revolutionize blockchain’s future, and we are grateful for your support in the next steps of this journey.”

How much good the prospect of Catapult will do for NEM’s market sentiment is unclear. The XEM coin was already almost forgotten in major media circles before the crypto winter took hold. Now its spiral has accelerated.

Start of a Trend?

Another of my predictions for 2019 was that many coins that we’ve come to know and love, would eventually roll over and die.

While NEM still has some life in it yet, one can’t shake the feeling that as the bear market extends even longer, and falls even deeper, numerous coins and tokens are going to crumble under their own weight.

I expect we should all get used to reading obituaries which read something like: ‘Here lies ____ (__), which fell in the crypto winter of 2019’.

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Ouch! Bear markets are necessary, right?

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You never know what coin will announce its’ team has run out of money - might be your favorite coin. So many coins will die like this during the bear market.

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It’s a good thing it’ll never happen with that beet!

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NEM Foundation Crumbles

NEM Foundation Crumbles

The NEM Foundation announced earlier this week that it was edging closer to bankruptcy in the wake of a devastating bear market that first began in early 2018. Despite organizational restructuring and a prior agreement to cut spending by 60%, the nonprofit foundation said it wouldn’t’ survive more than a month without support from the NEM community.

The foundation has appealed to its community for 160 million XEM tokens to help cover operational expenses. At current values, that’s equivalent to $6.57 million. The NEM community will vote on the matter later this month. Layoffs are expected to be announced later this month unless the full funding request is approved, according to Alex Tinsman, the foundation’s newly-appointed president.

Read more: Crypto Winter’s First Victim; NEM Foundation Crumbles as XEM Coin Price Sinks.

XEM is currently valued at $0.0411 for a total market cap of $370.6 million. It ranks 18th among active cryptocurrency projects.

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The commons issue. Let’s see how this plays out

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