The NEM Foundation is primarily known for their work on the NEM blockchain, functioning as a nonprofit organization that is supported by their online community. However, it seems that their funding is not enough to keep the company going in its current state, leading to massive layoffs and budget cuts. Reports suggest these widespread efforts are meant to put them away from the potential for bankruptcy.
Presently, as layoffs loom ahead, the entire 150-person staff is at risk for being on the chopping block, according to a report from CoinDesk. However, newly elected president Alex Tinsman of the NEM Foundation stated that the company will be asking the NEM community fund to contribute 160 million tokens (about $7.5 million) to their efforts to rescue what is left of the foundation. Presently, the NEM tokens, which hold the ticker XEM, are the 18th largest cryptocurrency in the world, based on market capitalization that is recorded on CoinMarketCap.
Tinsman, who only took over the organization this month, said,
“Basically, we realized that we had a month to operate, due to the mismanagement of the previous governance council.”
Now, the 202 members of the NEM Foundation will have to vote on the funding request next month, though the request is scheduled to be published on Thursday, January 31st. The total number of workers that the NEM Foundation lays off will be entirely based on the approved funding from the community.
The XEM token launched four years ago under the former president, Lon Wong, and it mostly is used on the NEM blockchain for transaction and service fees. Since there has been no update on the Catapult project, the platform’s native engine software, it appears as though the foundation still plans to launch in June this year. This platform has been used for voting procedures like the one that the funding will go through and was even used to elect Tinsman herself.
According to information acquired by Tinsman, the foundation spent 80 million XEM since December 2017 on marketing, during the time when Wong was in charge. At this point, Wong has not responded for requests for comment, but Tinsman said, “We’ve reduced marketing activities because it doesn’t make sense to market a product [Catapult] that isn’t out yet.”
An anonymous developer and NEM user revealed that Wong had used his visibility as a means for promoting unsavory ICOs for startups like ProximaX and Ecobit. The token sale for ProximaX, which lists Wong as the CEO, raised over $33 million last year. The developer stated that this action was considered “a breach of faith” by the community at the NEM foundation.
Continuing, the developer noted,
“There’s not a whole lot of people working on this platform. Even though it has easy, the community isn’t really there unless you go to Japan. We need more developer traction on this platform.”
This year, Tinsman already has a plan in place to bring more liquidity through the Foundation’s activities, which involve affiliate marketing and enterprise trading. She hopes that the new sources will reduce the need to beg for community grants. She added,
“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.”
