Singapore, SINGAPORE – Talk about shaky foundations. Just barely a week ago, in a shocking turn of events during the transition from last year’s Council, a financial audit was done indicating that the new leadership had low operational funds and therefore could not sustain the burn rate of the previous year. Therefore, a new Foundation restructure proposal was created and operations were suspended until new funding could be secured.
According to the announcement, the foundation’s original charter was to be the trustee of and make decisions for the public chain and spread its adoption. And that funds were spent heavily on marketing and training activities.
Of course, NEM co-founder Lon Wong’s involvement with ProximaX was considered by many to be a point of contention. Wong left the foundation in April last year. Nevertheless, since new leadership has intervened, they are now product-focused and revenue-driven. Something that has been lacking from many projects crowdfunding phase. There is will also be a shift to a more centralised management structure instead of splinter cells with regional head at the helm for more accountability.
It has been reiterated that the current Foundation is not bankrupt per se. But they are running low on both XEM and FIAT funds. It has to be clarified that the NEM Foundation is not NEM. There is a request not to the NEM community fund, but dedicated NEM funds to support the contributors to the NEM ecosystem that will be presented to the community.
It was made known that:
“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. 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.’”
Mauling by bears and purported internal mismanagement aside, the NEM Foundation operates as a separate entity and is one of many ecosystem contributors to the NEM open-source project. The update claims that the NEM open source project remains strong and thriving and Catapult development is unaffected by the dire financial straits of the NEM Foundation. They are betting that Catapult will be the blockchain engine that powers both private and public networks with smart contract plugins. It will become the core NEM engine. It was mentioned that there will be more public and private chain transactions when Catapult launches.
It is noted that the majority of the staff that will have to be made redundant due to the budget cuts and change of focus to a product-based organisation. Those that have been laid off will be given consideration for current openings under the new structure if funding is awarded. XEM is currently trading at approximately US$0.037 at press time, recovering slightly after taking a dip following the announcements. By far, a mighty Goliath in the ecosystem has been crippled and time will tell how the Foundation will be able to turn the tide given its current predicament.