Altcoins

NEM Foundation Might Be The Cryptocurrency Winter’s First Victim

NEM Foundation Might Be The Cryptocurrency Winter’s First Victim

The cryptocurrency winter lasts longer than most anticipated. Many thought that NEM foundation would become the “Ethereum Killers,” but now, they only have one month left of funding.

Is the NEM Foundation on the brink of destruction?

Everything seemed to go according to the plan for NEM foundation. A few months ago they stated Ukraine would use the blockchain to combat electoral fraud. They launched in May 2015, and many see NEM as one of the major competitors for a future blockchain. It is the 18th biggest cryptocurrency according to Coinmarketcap.com and holds a market capitalisation of $373 million.

According to a historical snapshot from CoinMarketCap from mid-January of last year, NEM ranked #7 in the top 100 cryptocurrencies by market cap. It then held a price of $1.07. Today, it has lost 96% from its all-time high and currently trades around $0,04. It is at risk of its development team running out of funding. While the percentage decline is typical of most cryptocurrencies, they were hit particularly hard due to the Coincheck hack that set the tone for the future of the cryptocurrency. In January of 2018, Coincheck lost $534 million in NEM tokens to hackers which were a major blow for the foundation.

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NEM is out of money, but they have a plan of survival

According to a new message to the community, things look sour for the foundation. Apparently, they only have one month left of funding. Even though they raised a lot of money to pursue their goals, they had a high burn rate. They also had trouble coordinating their staff. In the message they wrote:

“When the new council arrived on January 1, 2019, we opened the books and saw the results of 2018. We saw a lot of talented people who were working hard, but not aligned with the same goals. The efforts being duplicated, and inconsistent metrics of success. We also saw very little accountability for funds and questionable ROI, leading to a burn rate of 9 million XEM per month. “

The budget decisions they now have to make are difficult. The council often meets since December to figure it out. They have made some major changes:

“We have completely rebuilt the NEM.io Foundation’s operating structure and mission. We are hitting refresh and starting from scratch. It means a new focus under this new leadership and a NEM Foundation that truly exists to serve and support its powerful community. The way we will do this is by transitioning from a promotional-focused organisation to a product-focused organisation.”

Since the most critical part is the burn rate, they have revised their spending and look to reduce their spending by 60 per cent from its previous levels. However, since they only have one month left before they run out of money, they have put their operations on hold. It will also vote on asking the NEM community to fund further work with around $7.5 million.

“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.”

Their final message is that NEM foundation will change for the better and will survive the cryptocurrency winter.

“We have one final message for all. The NEM Foundation you knew before is gone. The new proposal will clearly outline a significantly new approach and mission. We exist to serve and support the community responsibly.”

Image Source: “Pexels”

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