The blockchain based asset management network NEM announced that its foundation has been reorganized based on present realities due to the effects of the current crypto bear market.
The January 31 announcement stated that the previous structure of the NEM Foundation does not fit the present market and governmental conditions adding that the old foundation has ceased to exist as it was known before now.
Cut Down On Budgetary Spending
The network intends to spend less than half its previous monthly budget of nearly $400,000 citing the crypto winter as the reason for the new measure.
“The NEM Foundation has restructured to eliminate regional teams and replace them with newly created product-focused teams,”
The new policy is mainly aimed at cost reduction bearing in mind the projected monthly 9 million XEM the Foundation burns is wasteful. The consideration is that the coin value continues to plunge as a result of bear market since January 2018.
Criticism for Spending Using Old Model
XEM currently trades at $0.042 having bled out a large chunk of its value with other altcoins that have struggled for months. The recent reorganization aside reflecting present realities is the result of community criticism of spending and management under the old model despite the realization that the project has been working on evolving a more efficient governance structure.
The release acknowledged that the existing structure failed to deliver on the expectations of the community adding that this was not an obvious issue when prices were high. It added that the Foundation now seeks remedial measures to ensure survival through the hostile market.
“The XEM exchange rate has suffered catastrophic drops from this time a year ago, just as many other ambitious cryptocurrency projects have suffered, now the NEM Foundation is facing challenging budget decisions.”
Announcement Led to 10.9 Percent Price Drop
XEM, the NEM token reached an all time high of $1.9 in January 2018 like many altcoins but the Coincheck hack in which $534 million worth of XEM was stolen resulted in a drop that signaled a downtrend accerlerated by the 2018 bear market.
The announcement on January 31 that the NEM Foundation had ceased to “exist as it was known” from regional teams to product focused teams caused an 10.91 percent drop in the value of XEM.
The announcement is part of the recent trend as crypto networks seek to make readjustments that would help them through the lean market conditions as seen with companies such as Bitmain Shapeshift and Consensyns which laid off some staff in recent weeks. The NEM Foundation reorganization though comparable didn’t involve lay-offs.
What other effects do you expect the bear market to have on crypto networks? Send in your comments below.