NEM Foundation Update – February 2019
The Executive Committee and Council Members for NEM Foundation would like to thank you for your contribution and participation in the NEM Forums concerning the Funding Proposal 2019 – https://forum.nem.io/t/nem-foundation-funding-proposal-2019/ 2
Feedback has been tremendous with multiple comments in the forum with many replies, questions and thoughts over various social media channels.
Without the community, NEM Foundation would not have the drive to ensure that we act with high standards and be accountable to ourselves and the community. As promised, we have passed the 5-day discussion mark and will announce changes and updates that will take place as a result of the feedback:
Change requirement from a 3% minimum of total ‘YES’ and ‘NO’ votes to a minimum requirement of 3% ‘YES’ votes only. 3% minimum requirement will not include ‘NO’ votes.
Reasoning: we have heard from the community and would like to uphold the standards and request. As a result of this change, it will take more ‘YES’ votes for the funding proposal to be approved, and we are to implement the change based on the community’s feedback. Changes will be reflected in the proposal.
Community Best Interest Policy
To include an establish a Community Best Interest Policy which will consist of a set of statements where we will take the community’s best interest in all council meetings which will also flow down to all employees and service providers. You can view the policy here 3.
Reasoning: during discussions, we have found that the best way to answer questions for the community is always to ask the question, ‘what is in the best interest of the community when we answer these questions?’. Based on feedback, much interest revolves around support for Catapult and the price of XEM, which is something we will be addressing continuously.
Code of Ethics and Conflict of Interest Policy
To include a Code of Ethics and Professional Conduct Policy whereby all council members and employees of NEM Foundation will conduct themselves professionally and declares matters which may trigger a conflict of interest from a financial and ethical standpoint. You can view the policy here 5.
Reasoning: there have been questions on the high salaries provided to the c-level leaders and the role they play in providing funds to projects to support Catapult, product and various areas. The policy will ensure we keep high standards and breach of conduct will lead to disciplinary action.
Standards on Information Sharing Policy
To include a Standards on Information Sharing Policy where we will ensure that we hold ourselves accountable on the sharing of information as there will much information that will be shared, sent, received and communicated through various time zones, social media channels and more. You can view the policy here 2.
Reasoning: we want to ensure that we share information that is relevant, and that authorisation is required to share confidential information, to avoid a breach of legal obligations on the sharing of data.
Questions on Expenses and Costs
We had done an audit on the 2017/2018 expenses and cost, which has led us to the difficult decision to lay off team members and suspend areas of operations globally. We are committed to ensuring that there will be a full audit which will be available to the community. We will commit to publishing the review as a critical priority the moment we have approval for the funding.
Reasoning: we have not completed a full audit, and there is personal data that we need to manage so that we abide by the privacy laws of the jurisdictions that we have a presence in during the 2017/2018 period. We have been paying full attention towards the proposal, and an audit will be conducted by the council to ensure that there is transparency in NEM Foundation’s operations both past and present. We will also be providing that transparency is practice as we look towards the future.
Other Relevant Questions
How does the NEM Foundation view the NEM Labs proposal that has been put forth, particularly in this timing? Is NEM Foundation in competition or collaboration with NEM Labs?
We will be voting for NEM Labs, and we hope the community does too. The reality is that we need as many independent contributors building on NEM as possible to help push Catapult and the NEM ecosystem forward. You can view the Joint Statement produced here – http://bit.ly/JointStatementNFandNL 1
Both NEM Labs and NEM Foundation have a place to exist and thrive in the same ecosystem. The services don’t compete but instead strengthen one another by ensuring collaboration to the platform is done in a more unified way than previously. The result will be more contributions to the PMC project and overall quicker progress on Catapult.
How has the new council been coming along? Are your meetings productive since there is mention that meetings occur very regularly?
Compared to last year, the new Council members work more cohesively and are more unified. We have meetings 2-3 times a week and communicate daily. We have open discussions and apply a community best interest policy to everything we discuss. If it’s not in the best interest of the NEM community, we all agree not to do it. We also put in our agenda comments on the NEM Forums and social media – all critical comments are discussed.
What happens if NEM Foundation is unsuccessful in meeting the minimum voting requirement to have its funding proposal approved?
The Foundation will use all remaining funds to pay off liabilities and (very likely to) proceed to close the Foundation. The community will have to self-organise on the management of social media, partnerships, commercialisation and sustainability of the NEM blockchain technology platform.
We might not be able to capitalise on our assets and intellectual property. It may bring things back to the beginning before the Foundation was formed and the community took part in decision-making collectively. All MoUs and important partnerships might likely have to be dissolved which will be a significant loss to the development work done over the last few years. It may impact the price of XEM negatively and will prove difficult to attract more investors to acquire XEM if there is no Foundation structure to support the NEM blockchain. Also, the untapped potential of new leadership is not recognised. Not a good scenario but the council has thought through this, and a situation like this could occur.
How do you plan to manage the finances for NEM Foundation moving forward? The past expenses and books do not seem to be available to the community to view?
Funds will be allocated respectively to each project leads as it deemed worthy based on their request for proposal. The CFO will authorize the release of funds with approval of the ExCo and Council.
A balance sheet of XEM and FIAT will be monitored and reviewed, and an Annual Financial report will be shared to the public once we complete the audit. Also, analysis of where the funds were used (including salaries), and if there was any return of investment will also be shown in the said report.
How are you going to bring the price of XEM up?
There are two different approaches to do it. The first is a direct market approach, NEM Foundation has been doing that over the whole of 2018, yet bitcoin’s drop in price together with the exchange hacking incident damaged XEM price brutally.
In the year 2019, the Foundation decided to take a different approach. Instead of putting our resources directly into marketing, we will pivot to focus mostly on Catapult development and developer community building. This approach will NOT have an instant boost on price like listing in the top ten crypto exchanges (or maybe so), BUT we are more likely to thrive in a long period through this approach, and the XEM will go up steadily in the long run.
Should we focus more on tech development instead of Business Development and marketing?
32% of the total budget of the new NEM Foundation will be allocated to technology, which includes in-house technical staff, as well as a list of high priority tech projects. This allocation will make a significant contribution to Catapult development, which is one of the critical priorities of the new NEM Foundation, as a product-oriented organisation. Also, marketing follows the launch of the product, not necessarily before. Strategically, we’ll see more conversions and contribution to Catapult if we have a product to direct people to.
Another key priority is financial sustainability, which we will achieve through an integrated business approach and effective interaction of business development, marketing and product team, which will allow the Foundation to generate revenue and commercialise Catapult, contributing to the NEM blockchain technology adoption.
Should we combine Chief Marketing Officer and Chief Business Development Officer roles, what are your thoughts? Also on Chief Revenue Officer and Chief Financial Officer roles.
The critical difference between marketing and business development is that – marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Business development is the process of pursuing strategic opportunities by developing new products, entering into new markets and forming business partnerships with other companies.
There is a difference between both. As a global organisation, we must maintain teams with focused and precise tasks, to achieve the objectives in the time offered. Both roles must work together to accelerate the speed of customer acquisition and new business so that the Chief Revenue Officer can establish new revenue plans. We also want to focus on being revenue-driven and will take a full-time job to ensure that we develop revenue plans fast. Hence the decision by the council is to maintain in keeping all role separate with high levels of accountability.
How will the NEM Foundation contribute to Catapult?
We will not be contributing to the core, but we will be building SDKs, tools, and apps for the community to use. We will also focus on making sure that there are proper documentation and educational materials for future developers building on Catapult. After the mainnet launch, we will aid and assist those companies building on the public chain.
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