Officials say the ongoing low price of their XEM token and poor spending efficiency have led to the need for an urgent restructure.
The Foundation, which previously had a budget with a monthly burn rate of 9 million XEM (~$392,000), now plans to spend less than half that amount, as a new streamlined entity aims to cut costs.
“The NEM Foundation has restructured to eliminate regional teams and replace them with newly created product-focused teams,” the announcement explained.
Summarizing the changes, NEM confirmed that the “NEM Foundation you knew before is gone.”
The impetus for the changes reportedly comes from a lack of funding and criticism of spending under the old Foundation model.
XEM, the company said, had a difficult year in 2018, losing a significant portion of its value against previous highs as part of the ongoing cryptocurrency bear market.
XEM price and market cap 1-year chart. Source: CoinMarketCap
“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,’” NEM continued in the post, adding:
“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.”
XEM/USD is trading around $0.044 at press time, dropping over 8 percent on the day following the publication of the news. The pair hit an all-time high of $1.90 in early January 2018.