Update from the NEM Core Team on funding proposals for the NEM Foundation & NEM Labs

News
#1

Dear NEM Community,

This is an update from the Core Team on the latest funding proposals for the NEM Foundation and NEM Labs.

As many of you know, the NEM Foundation and NEM Labs submitted proposals and completed POI voting requirements in February. These steps, while important, are not the only requirements for receiving funds from XEM reserve accounts. The proposals must also be vetted and approved by the Core Team. The Core Team is the original group of developers, supporters, and community members that were involved in creating the NEM blockchain.

The community has an important governance role, which includes watching over these reserves until such time as the reserves are no longer needed. But the Core Team also has an ongoing guardianship role to make sure that the substantial, but finite, reserve funds are used most effectively. The Core Team can also perform due diligence research and otherwise verify details that the community may not be able to. This guardianship is especially important during market downturns such as this one.

The NEM Foundation proposal passed its community approval on 20 February 2019. Since then the Foundation has been working with the Core Team to verify capabilities and incorporate feedback. Based on this review we believe much of the proposal has a good chance of success and 25 million XEM were released as the first installment of funding for the NEM Foundation, with later installments pending.

The NEM Labs proposal also passed its community approval on 20 February 2019. However, based on further review and discussions with the NEM Labs team, we have decided that the NEM Labs funding will not be approved.

We value the talent and contributions of the NEM Labs team members, and we hope they continue in their contributions. Although we found value in some of the projects enumerated in the NEM Labs plan, the NEM labs team was unable to convince the majority of the Core Team that:

  1. There is a compelling justification as to why the NEM Labs team needs to be a completely separate organization as opposed to carrying out its planned activities in partnership with or as part of the NEM Foundation.
  2. There is a big enough effort at reducing the redundancies and expenses between the two organizations, as requested by many community members and us.
  3. There is enough incremental value added by NEM Labs given the existence of the NEM Foundation to warrant funding another organization.
  4. That funding the NEM Labs team will accelerate the launch of the catapult public chain. (Nearly all of the NEM Labs resources allocated to launching the catapult public chain can and will be funded by the NEM Foundation. Although certain biz-dev activities will likely be delayed, we don’t view them as critical pre-launch.)
  5. There is enough detail about how the NEM Labs team plans to achieve their goals (e.g. which resources will be allocated to which projects).

We recommend that the NEM Labs team rework their proposal and submit it under the NEM Foundation Service Provider (contractor) program. The Core Team encourages affected NEM Labs employees to apply for positions within the NEM Foundation in order to continue their contributions on growing the NEM ecosystem.

We want to say thank you to the community for your patience and understanding while we have been working through these issues. We take these decisions seriously and hope you can see how important this work is in setting up NEM for success in the future.

While we strive to be strong custodians of NEM’s resources, we still see great opportunity for community-driven projects and organizations. We are committed to growing and supporting the broader NEM ecosystem. We will work to ensure there are multiple options and pathways to success for every good project.

One of the most important pathways is the Project Management Committee. Anyone who wants to create a NEM project can submit to this committee, which will help the project find its place in the ecosystem and engage with the community. You can find out more about the PMC here https://github.com/nemtech/community

22 Likes
NEM Foundation Update: March 2019 (Part II)
#2

I voted yes for NEM labs and Foundation proposals but I hope NEM labs will cooperate with Foundation. I think there will be interest for both parties to cooperate. Please keep us updated.

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#3

I think it’s a shame. I dug their task orientated approach, but I’m not surprised either. Both proposals coming along at once was the least opportune timing imaginable.

1 Like
#4

Dear NEM community
I guess the world isn’t fair. But I wouldn’t suspect this outcome anyway…

Where were you (core devs and early community members) when Foundation leaders were chosen based on the vote of 140 people? Where were you during 2018 when Foundation was spending millions without any KPIs?

Why the Foundation is justified to be a completely separate organization? But NEM Labs isn’t? Who decided on this priority? Cause looking at the vote result, there was an indicator of greater trust towards NEM Labs.
But I guess as always, fuck the contributors and fuck the community :joy:

#5

I don’t think timing helped this proposal either.
It seemed a situation where if the NF vote failed, then NL would have likely passed. With both proposals wanting to further catapult, it was a matter of having to pick the most viable proposal.

I hope their team can now come up with a new proposal that better suits the circumstances with the NF still operating.
The way i saw the proposal was that it was almost like it could only succeed with no NF, as they probably assumed it would not get the funding to continue.

As suggested here, hopefully some of the staff apply for a position with the NF.

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#6

This was a tough process but I appreciate the transparency of the Core Team in sharing their reasons. The NEM Labs team is talented and I will do everything I can to help them out.

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#7

Thank you, Core Team, for the update. It’s a shame, but I suppose it’s for the better.
It is important to understand in this kind of market that the essentially scarce funds need to be allocated in a way that achieves maximum efficiency and with minimum wasted expense.
I do hope the NEM Labs resources would be willing to join the NEM Foundation and work towards a common goal.

#8

Okay, here we go again.

How about “Where were you, Kristoff?” He was the president of NEM and current NEM Labs CEO.

Let’s not focus on the previous foundation.

This is a new foundation that follows new rules. We have a new president that takes responsibility and prefers transparency.

People who don’t like it, can sell their stock and leave NEM. The new foundation has something that the previous didn’t. It’s called BALLS.

2 Likes
#9

i’d like to remind that funds for operation of nem foundation were assigned somewhere end 2016/early 2017.
once they reached nf, core team did not have much control over the course of actions.

that’s not how funding will look like for any future endeavours.

7 Likes
#10

Mixed feelings for this, although it is good to see real oversight on the funding aspect. Apart from the devs, how many or who constitute the ‘core team’?

I hope to hear more from NEM Labs and their NEMsp efforts.

#11

2017 was good for NEM, but when it went down, he didn’t take proper decision.

You can make all excuse, but it takes a lot of perseverance, dedication, will power to take bold decision and act like a President & CEO. As a CEO you should think about cash flow and revenue from Day 1. If there is an issue with fund management, you must discuss with the stakeholders. Otherwise, you will end up giving excuses to the stakeholders, and that’s what happened here. Core dev does not believe in the leadership.

Not just in NEM, it happens everywhere. If you want to raise funds from any VC, they will go through the history of the leader. No matter how good they are with tech. Even if they have an army of developers, they will not commit.

People invest in People. Not in technology. You need to understand that.

I doubt that NEM Labs can succeed independently.

@gimre Not a reply to your post :smiley:

1 Like
#12

I can appreciate the rigour that the Core Team has put both proposals through, and this has been a tough process and decision. Thank you Core Team for your transparency in update.

2 Likes
#13

I think points 2., 4. and 5. are the most important here. That is were NEM Labs lost me too, despite my respect for previous contributions from all the members of NEM Labs.
Money is in short supply these days and nothing should be funded unless it is abundantly clear that it will add sufficient value.
I also take comfort in the fact, that the core team takes these things seriously and is willing to deny funding, to even well known nem community members.

2 Likes
#14

The new approach to funding based on instalments as opposed to all the funds in a big lump sum is a good approach.

4 Likes