NEM Foundation Responds to Community Concerns Surrounding Recent Bankruptcy Rumours
The NEM Foundation recently took to the internet to clarify a host of issues surrounding its current financial state. In regards to the matter, the NEM Secretariat Office under the leadership of Foundation President Alexandra Tinsman elaborated on the firm’s future plan of action and how they plan to sort of out their existing troubles in the smoothest manner possible.
For starters, Tinsman noted that NEM has already “applied” for a new funding grant from an established VC firm— with the first batch of money expected to arrive within a period of 30 days. With that being said, Tinsman then confirmed that her company has had to lay off quite a few employees owing to the sluggish market conditions that have persisted all through 2018.
A Closer Look At The Matter
A quick look at NEM’s recent back and forth with its community members shows that the company is looking to possibly make use of a crowdfunding event to help it gain more liquidity. On the subject, NEM’s executive brass confirmed that more details regarding the fundraiser will be released soon.
At this point in the article, it is also worth mentioning that NEM’s native token offering the ‘XEM coin’ is currently ranked 18th on Coinmarketcap (in terms of its total market capitalization which is estimated to be around $365 Million).
“This request will be made as a proposal to the community soon. It’s important to remember that the NEM Foundation operates as a separate entity and is one of many ecosystem contributors to the NEM open-source project. Therefore the NEM Foundation is not NEM. The NEM open source project remains strong and thriving and Catapult development is unaffected by the financial situation of the NEM Foundation.”
NEM’s Executive Brass Reaches Out To Employees
Addressing the recent layoff issue, the NEM foundation confirmed that they have put all of their ongoing operations “on hold”. As a result of this, some existing employees have been laid off temporarily/permanently— depending upon the severity of their budget constraints.
On the subject, the NEM Secretariat Office expressed its regrets in having to make such a tough decision.
“We cannot apologize for the past decisions before we came into leadership, but we want to let you know that there is hope for the future. We would like to emphasize that the NEM Foundation is not firing any staff. Due to budget constraints, there are layoffs. In addition, there is a complete structure reorganization underway. Those that have been laid off will be given consideration for current openings under the new structure if funding is awarded.”
Accusations And Rebuttals Fly
During a recent Q&A. a whole host of NEM backers were interested in knowing why the previous management team had spent more than 80 million XEM token on different dev issues even though the firm was facing such dire straits. On the subject, NEM’s management team stated that the funds were used only to “facilitate upcoming marketing projects”.
“The foundation’s original charter was to be the trustee of and make decisions for the public chain and spread its adoption. Awareness was a secondary goal of the foundation because it should increase naturally as a result of (successful) adoption. Therefore, in 2018 funds were primarily spent on marketing activities and training.”
Lastly, it is also worth mentioning that NEM’s audit books clearly show that the firm had been incurring losses of upto 9 million XEM per month— something that has been attributed to “the failure of the company’s decentralized regional leadership structure”. For those of our readers who may not know, NEM’s working model previously consisted of local teams that could work independently with a high degree of financial autonomy.
“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.”
A Fresh Start Is In Order
Looking towards the future, the NEM team has now devised a new operational strategy that will get rid of existing regional teams in favor of product-focused workgroups. In addition to this, the new PoA also states that the ‘level of autonomy’ that the above stated regional teams currently enjoy has been slashed by a huge margin.
“All Foundation employees and contractors will now report to one of the seven product teams. The heads of these teams are Chief Technology Officer, Chief of Product Management, Chief Financial Officer, Chief Business Development Officer, Chief Operations Officer, Chief Marketing Officer, and Chief Revenue Officer. 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. “
Last but not least, NEM has also signaled for a massive budget cut that will see the company reduce its annual expenditure by 60%.
Even though the path ahead for NEM is quite rocky, the fact that the project is already well established still gives a good chance of survival. With that being said, it now remains to be seen what future announcements will be made by the company and how the firm’s future plays out from here on end.