NEM Can Became Centralized After Coincheck Attack

According to the experts, XEM tokens marking mechanism, which is being developed after Coincheck hack, can lead to centralization of NEM
02 February 2018   688

NEM Foundation is developing a mechanism for automatically tracking and marking XEM tokens in order to prevent hacker attacks, similar to the one that the Japanese currency exchange Coincheck recently underwent. Critics are convinced that this will have an extremely negative impact on the ecosystem, depriving XEM tokens of the interchangeability properties and making the network useless from an economic point of view.

The goal of the developers is to mak tokens stolen by hackers useless, the total amount of which is 5% of the total issue. Thus, attackers will not be able to sell them on crypto exchanges, because sites will know that tokens are transferred from an address associated with hackers.

Experts believe that this mechanism is contrary to the idea of ​​decentralization of the network, since the NEM Foundation and the crypto-exchange can distinguish marked tokens from the total mass, as well as decide whether to accept them or not.

The exchanges will be able to claim that a number of XEM tokens are involved in illegal activities, although this may not be true. As a result, XEM will lose the interchangeability property, which is the main characteristic of money.

Such steps by the NEM Foundation indicate centralized control over the blockchain, which contradicts the original concept of technology.

The developers also refused to host the event, stressing that the community does not support this development.

NEM Foundation to be Almost Bankrupt

Newly elected president believes 160 000 000 XEM could fix the situation
31 January 2019   491

The NEM Foundation, a community-sponsored nonprofit organization to promote the blockchain of NEM is planning a massive downsizing of its staff, which currently has 150 people. This is reported by CoinDesk.

It is assumed that these steps are associated with a significant reduction in the budget and the forthcoming restructuring of the organization based in Singapore.

Thus, the newly elected president of the NEM Foundation, Alex Tinsmen, announced plans to send a request to the NEM public fund for the allocation of 160 million XEM tokens (about $ 7.5 million), which should help save the organization from bankruptcy.

Basically we realized we had a month to operate, due to the mismanagement of the previous governance council.

Alex Tinsman

President, NEM Foundation

After the request for the allocation of the specified amount is made officially, all 202 members of the fund will be invited to vote for it. The scale of the cuts will depend on the amount of funding approved, Tinsman added.

According to her, the NEM Foundation spent about 80 million XEM from December 2017 to January 2019 primarily on marketing.

We’ve reduced marketing activities because it doesn’t make sense to market a product [Catapult] that isn’t out yet.

Alex Tinsman

President, NEM Foundation

In particular, Alex Tinman refers to the blockchain engine Catapult. Its full-featured release was announced back in May last year.

NEM developers and users who wish to remain anonymous also state that the organization’s previous president, Lon Wong, used his position to promote questionable ICOs. As a result of these actions, he allegedly undermined community confidence.

According to Tinsman, a very strict budget policy will be respected under the roadmap for 2019. It is assumed that each team will be allocated a limited budget, there will also be requirements for public disclosure of documentation describing the tools they develop for the NEM ecosystem.

It is also planned to monetize the activities of the NEM Foundation by educating corporate users and affiliate marketing. This is expected to help reduce the organization’s dependence on community funding.