Business 31 January 2019Erik Gibbs
NEM Foundation is almost bankrupt
The NEM blockchain, which is behind the NEM (XEM) cryptocurrency, isn’t doing so well. According to a notice released by the NEM Foundation, a non-profit group formed to promote the blockchain, the foundation is short on cash and apparently could only survive for about one more month. In an effort to avoid having to file for bankruptcy, it will have to begin staff layoffs and is currently undergoing a significant restructuring.
The notice reads, in part, “The XEM exchange rate has suffered catastrophic drops from this time a year ago, just as many other ambitious cryptocurrency projects have suffered, now the NEM Foundation is facing challenging budget decisions. We are in a tough spot like many others in this space. It is our duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development.”
The organization, which is community-funded, is turning to the community in order to stave off the impending bankruptcy. It plans on submitting a funding request that it hopes will attract around $7.5 million and keep it solvent.
According to Alex Tinsman, the NEM.io Foundation president, “When the new council opened the books on 2018, we saw a lot of talented people were working hard, but not all of us were working off the same playbook. A media report that the Foundation is out of funds is incorrect, however past burn rates are not sustainable to bear the Crypto Winter. We saw efforts being duplicated, and very little to no accountability for funds. We decided to transition the NEM.io Foundation from a promotion-focused organization to a product-focused organization in order to create a sustainable future.”
To help with the transition, Tinsman is going to establish teams with specific budgets and requirements to innovate on the NEM ecosystem. She states that the group will also monetize the foundation’s activities this year, which will include affiliate marketing and enterprise training. That move is designd to reduce the group’s dependence on community grants.
Tinsman, who was a communications director with the NEM Foundation before being tapped to lead the organization, added, “Each of these team’s leads will be responsible for reporting metrics and delivering ROI directly to the council and community to maintain transparency and accountability. All funds spent will flow through the head of finance and adhere to consistent accounting standards. The council will be focused on oversight and will not be directly involved in operations.”
The old NEM Foundation is gone, replaced by a “leaner, product-focused, revenue-driven, community-oriented organization,” explains the release.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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