The cryptocurrency industry is under a lot of pressure from different angles. Exchanges are getting hacked or forced to shut down. Numerous projects turn into blatant scams as developers bail. It now seems the NEW Foundation is forced to pivot its approach as well. A bit of an unusual development, although it also seems to make a lot of sense.
A Tough Call for the NEM Foundation
When cryptocurrencies turn bearish, few people tend to look beyond the repercussions to their own portfolio. A downward price trend isn’t healthy for anyone involved, and it doesn’t just affect traders. Over the past few days, it quickly became apparent exchanges are also facing a lot of pressure due to the lack of trading volume and overall interest. Liqui was the first of potentially many victims paying the ultimate price under these circumstances.
One of the projects seemingly crumbling under the pressure comes in the form of NEM, or New Economy Movement. Although this currency was a rising star in late 2017, last year put a completely different spin on the project. The hack of the Coincheck exchange saw over $500m worth of NEM being stolen and potentially dumped on the market. Ever since, the price has been recovering, although the overwhelming bearish pressure hasn’t allowed for any positive changes to speak of.
To make matters worse, it now seems the NEM Foundation will be undergoing some severe changes. More specifically, there were initial reports of how the Foundation would disappear altogether, although that is no longer the case. In fact, it seems the current focus lies on shifting from focusing on promotion to maintaining a more product-focused approach first and foremost.
This decision was primarily fueled by the massive decline in XEM value over the past year. Similar to all other cryptocurrencies, tokens, and digital assets, it has quickly become apparent NEM could not prevent the downtrend much longer either. As this value has continued to plummet as more time progresses, the budget decisions waiting to be made are very different compared to what one would be used to.
In the original post, the biggest change is outlined as follows:
“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.”
Although this would seem to be a deathblow to the NEM Foundation, there is also some positive news to note. There are still plenty of possibilities to explore on the technical level. Regardless of the current price, the NEM technology is still working as expected and can be used to develop new business applications. For now, the focus remains on pushing ahead in this industry for the foreseeable future.
Shifting to a more product-oriented approach is also more than acceptable. After all, it is only normal the projects focuses on business use cases rather than the promotion of the currency itself. Whether or not this shift in approach will have a meaningful impact on the XEM price moving forward, remains to be determined at this time. There is still an interesting future ahead for this project despite the current struggle, although the road ahead will be a long and hard one.