Hi NEM Community,
It’s been about one month since the new council started, and a lot has happened. We are committed to transparency, so we are pulling back the curtain with some good news, some difficult news, and some major announcements.
For the past two years, the structure of the NEM Foundation was a first-of-its-kind attempt to running a decentralized promotional organization in different regions around the world. The Foundation was trusted with making decisions for the NEM public chain and spreading its global adoption. In 2018, the Foundation tested the concept of decentralized regional leadership, allowing each region a great deal of freedom in how they operated as long as they were promoting NEM.
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. 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. Maybe that didn’t seem like a big problem when the XEM price was high, but it’s a very big problem as we seek to sustain a viable organization in the ‘Crypto Winter.’
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. We are in a tough spot like many others in this space. It is our duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development.
It’s clear to the council that we need to make swift changes from an operational standpoint in the interest of NEM users, employees, developers, and partners. The council has been meeting multiple times per week since December (we convened before we were even official) and working around the clock across seven time zones to come to an agreement and do the right thing.
So here’s where we currently stand. We have completely rebuilt the NEM.io 88 Foundation’s operating structure and mission. We are hitting refresh and starting from scratch. This 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 organization to a product-focused organization.
The NEM Foundation has restructured to eliminate regional teams and replace them with newly created product-focused teams. 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. All funds spent will flow through the head of finance and adhere to consistent accounting standards. The council will be focused on oversight and will not be directly involved in operations.
In our new proposal, we are greatly reducing promotional spending and we are adding an aggressive set of goals for tech product features, developer tools, and programmers that will help make the NEM platform the best in the industry. We are also adding plans to be sustainable.
We are proposing a budget with a burn rate reduced by about 60% from its previous level. This will allow the Foundation to deliver ambitious results with responsible use of reserves. This budget is not yet confirmed, and there are more steps ahead before we have the funding needed for these plans.
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. This is painful since it hurts good people and partners, but the new council is aligned that we need to be transparent with what is happening behind the scenes of the NEM Foundation.
There are a lot more questions to answer, and we will share more information about all these announcements as soon as we can. But we felt the community should hear this news. We want you to understand the serious situation the NEM Foundation – not the NEM platform – faces and the drastic changes we are making and why we’re making them.
Now the good part. We can solve this. 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. Our new features will unlock uses, ready in months, that partners have been asking for for years. Our partnerships and business development efforts will now have full transparency and ROI reporting. Our teams will be aligned on goals. Our Finance and Product Development teams will have plans on exactly how to maximize the benefits of the next bull market.
Positive changes are happening so fast, we have never seen anything like this before. So we hope you’ll take away confidence and excitement for these improvements and the great things the NEM Foundation can do in partnership with you, our community. Because more than ever, the community owns NEM. And above all, we are trying to uphold the trust placed in us and do the right thing for the community.
Message to the community and staff
A message to the community, you are the bedrock and stronghold to the NEM blockchain platform. With the new council, the last thing in our minds is to let you down and the first thing in our hearts is to ensure that we focus on Catapult, sustainability, and NEM Foundation governance reform.
A message to the hardworking staff and loyal team members, words cannot describe the difficult decisions we had to make to come to this point. We are only one month old as the new council, and to face the facts of where we stand is horrific. 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 are optimistic about the future of the NEM Foundation under its new council. With a laser-focus on our mission-critical goals, we are positioned to remain an industry leader through this ‘Crypto Winter.’ The upcoming launch of Catapult will revolutionize blockchain’s future, and we are grateful for your support in the next steps of this journey. Expect to see us rise from the dust of this Crypto Winter and have a laser focus on our mission-critical goal which is the launch and commercialization of Catapult, our latest technology update that will revolutionize blockchain’s future.
Three things to expect:
Expect to see more enterprise adoption utilizing Catapult.
Expect to see more public and private chain transactions when Catapult launches
Expect to see stronger leadership, solid governance and more service to the community, partners and the world as we hope for a brighter future.
We know the community has high expectations, we will work our best to meet these expectations to the best of our abilities.
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.
We are a new, leaner, product-focused, revenue-driven, community-oriented organization. Thank you.