The new council of the NEM Foundation, the developer of the NEM blockchain platform, said that it is facing a critical financial situation, having just “one month left of funding” to keep the organization afloat. The foundation claims that they “can solve this.”
The new council, which was assembled just a month ago, comprises the top management team of the NEM Foundation. Judging from the wording of an update, published Thursday morning, the council was surprised to see that the current organizational structure of the Foundation offered “little accountability for funds and questionable ROI ”
This has reportedly led to a burn rate of 9 million XEM tokens per month just to keep the organization afloat – an unsustainable situation according to the council. According to today’s exchange rate, 9 million XEM is equivalent to USD 416,700.
Alexandra Tinsman, the newly elected president of the Singapore-based NEM Foundation, is planning layoffs, budget cuts, and restructuring in order to save itself from bankruptcy. The foundation, which promotes the NEM blockchain and its voting-based pilot schemes, functions as a grants-funded non-profit. However, Tinsman reported it has around a month’s runway left “due to the mismanagement of the previous governance council.” Tinsman must now submit a funding request for 160 million XEM tokens (approximately $7.5 million) to the NEM community, who will vote in February to decide the future of the company and the extensity of the layoffs for its 150-strong staff.
To deal with the situation, the new council said it has restructured the entire organization and eliminated regional teams that were focused on promotional work. Instead, these teams will now be replaced by newly created product-focused teams, the update said.
Tinsman added she’d prioritize a tight budget for 2019 and include the 202-member community in the decision-making process. She also hopes to make the NEM Foundation less dependent on grants in the year ahead, planning to monetize through “enterprise training and affiliate marketing,” according to Coindesk.
Also, the Foundation said that “in the face of this bad news, there are amazing possibilities.”
“NEM’s technology is still among the best for developers looking to build business applications, and our new focus is going to push us even further ahead in the industry,” they said, adding that the upcoming launch of Catapult, their latest technology update, “will revolutionize blockchain’s future.”
The NEM blockchain project, with its native XEM token, is currently ranked as the 18th largest cryptocurrency by market capitalization. The platform was launched in 2015, and has brought several innovations to the blockchain space, including a proof-of-importance (POI) algorithm and encrypted messages.