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Crypto Startups Review Their Strategies Amid Market Crash

Crypto Startups Review Their Strategies Amid Market Crash 101
Source: iStock/Andrey Bukreev

The crypto market crash this year is forcing blockchain companies to review their strategies and become more efficient in order to stay in the game and develop further.

ConsenSys, a major blockchain software company who employs 1,100 people across 29 countries, has become one of the most recent examples.

According to a company-wide letter by CEO Joseph Lubin, the firm is shifting to a new phase for greater efficiency, accountability, and attention to revenue and expecting startups under their umbrella to follow suit, media outlet Breaker reported.

The letter explains that from now on, underperforming projects will be cut off and projects will be judged on three metrics: revenue or return on investment, benefit to the Ethereum ecosystem, and social good - for which the means of assessment are “still being determined.”

“[Until now], it has been enough to show up, it has been enough to do something cool, it has been enough to make a splash,” Lubin told Breaker. This may even cause layoffs at the firm, although they say they will try to move affected staff into other initiatives.

ConsenSys is not the only one having to go to such lengths. As reported last week, Steemit, a platform for content creators that some have compared to Facebook and other websites where users themselves generate the content, has laid off 70% of its staff, as they want to focus primarily on reducing costs. The company cited “weakness of the cryptocurrency market,” as well as the diminishing value of their own STEEM token, and increasing operating costs as primary reasons for the lay-offs.

Also, SpankChain, a blockchain based product focused on the adult industry, last week confirmed it has downsized to eight people to focus more on the SpankPay product development and sales.

"We have USD 2 million in fiat but our crypto holdings were punished over the last few weeks and we have USD 1 million left in crypto, for a total of USD 3 million," according to the startup. It claims it raised USD 6.5 million when Ether was at USD 317.

SpankChain price chart:

Crypto Startups Review Their Strategies Amid Market Crash 102

Also, as reported today, the Ethereum Classic (ETC) development team ETCDEV has been shut down as a result of a lack of money to fund the operation. Igor Artamonov, founder and CTO ofETCDEV wrote in the announcement that the team has tried to secure investments to fund their own operations, but that this effort has been unsuccessful. Artamonov also noted that the crypto market crash was part of the reason for why the group, comprising of ten people, has found itself in an increasingly difficult financial situation in recent weeks.

These examples may be the start of a new trend, as the market crash seems to be weeding out weaker links and companies may have to start following suit. From the other side, authorities are nowcracking down on any crypto-related irregularities in an effort to keep the space in check.

The rules are tightening and only the best may survive: as American research and advisory company Gartner Inc. asserted back in August, blockchain may now be at the so-called “trough of disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.”

On the brighter side, this stage is then followed by the slope of enlightenment and the plateau of productivity.

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