The bearish market of 2018 has been unkind to cryptocurrencies, and it does not seem like any company has gone without casualties. Joe Lubin, the co-founder of Ethereum, has been working to support his ConsenSys platform, a crypto venture studio, even as one of its budding projects has been suffering.
Their Token Foundry platform has been one of the biggest sufferers, which is exactly why it needs to be reevaluated.
Token Foundry was developed with the intention of bringing new tokens into the cryptocurrency market. When it began during the success that 2017 brought to the industry, it was considered one of the most prominent opportunities that ConsenSys developed, supported by dozens of staff members. However, in the last few months, that has been far from the case.
Based on a statement from ConsenSys, the platform works as a “hub and spoke” model. Elaborating, The Block posted an explanation from the firm, saying,
“The ConsenSys ‘hub’ spawns, incubates, and accelerates ‘spoke’ ventures through development, resource sharing, acquisitions, investments, and the formation of joint ventures.”
Right now, Token Foundry is included as a “spoke,” but it is clear that the monthly update moved it into a “hub” position.
Along with the reduced roll, ConsenSys has been hemorrhaging workers continually. In fact, The Block was told that CEO Harrison Hines has already departed. Token Foundry, despite its purpose of bringing in new tokens to the cryptocurrency industry, has only helped four token sales, further demonstrating its demise.
All of this bad news is leading to multiple firings, though there are plenty of employees that seem to be leaving on their own accord to avoid such a fate. Some of the recent departures, according to The Block, include:
Janison Sivarajah, software engineer
Royce Moroch, UI designer
Sydney Lai, head of strategy
Pei Chen, business development
Andy Moy, capital markets
Karen Scarbrough, smart contracts
Michael Wasyl, business development
Sanaya Mirpuri, head of product marketing
Julia Kimmel, head of talent and human resources
Mahoney Turnbull, head of community
One source added that there were seven staff members that were fired without notice in the last week. Even with all of this bad news, ConsenSys seems to be looking for more options to help it survive the bear market.
Jay Thakrar, an investor with ConsenSys, commented, “We are expanding our offerings and will continually reassess our positioning to ensure Token Foundry’s future success in this dynamic space. Included with our expanded offerings will be an expansion of our team as well to hire for appropriate roles.”
There have been quite a few debacles to lead to the difficulty that both ConsenSys and Token Foundry have been experiencing.
One of the most notable sales was for Civil, which was a blockchain-based endeavor that focused on “building the new economy for journalism.” The sale only brought in $1.4 million, which was substantially below the goal of $8 million as the minimum raised. Civil issued a blog post at the time, saying,
“The CVL token sale didn’t succeed. We’re disappointed, but we’re as committed as ever to seeing Civil out in the world.”
Adding salt to the wound is the suffering initial coin offering (ICO) funding effort. In fact, when evaluated by Bloomberg News, the writer found that this is the lowest month for ICOs in 17 months, as of September 2018. They also noted that this slump seemed to correlate with comments from regulators, who believe that the majority of tokens are considered securities and would have to be registered with the SEC.
Galaxy Digital’s Mike Novogratz has since decided to migrate from ICOs for token sales and capital, opting for large institutions instead. Explaining, he said,
“The Company is adapting to the regulatory framework and the opportunities it is currently seeing, and therefore repositioning its Advisory business from focusing on small ICO advisory and blockchain consulting to instead serve larger, more institutional clients in the space.”
Time will tell how ConsenSys survives the bear market. Perhaps opting for solutions involving major banks like Galaxy Digital could be the key, though the new staff that the company hires will indisputably make a difference.
For now, the revival of Token Foundry may have to wait until the bear market starts to fade away.