ConsenSys Reportedly Planning to Lay Off Up to 60% of Its Staff

Siamak Masnavi

On Thursday (20 December 2018), technology news outlet The Verge reported that ConsenSys, an Ethereum-focused blockchain incubator ("venture studio") and solution provider, was planning to spin off most off of its 50+ startups ("spokes"), and that this could mean up to 60% of the company's staff could be laid off.

ConsenSys, which was founded in 2015 by Ethereum co-founder Joseph Lubin, currently has "over 1100 employees distributed globally in every continent except Antarctica." It primarily sees itself as "a venture production studio focused on building and scaling tools, disruptive startups, and enterprise software products powered by decentralized technology, specifically Ethereum," and describes its mission as using "these solutions to power the emerging economic, social, and political operating systems of the planet."

ConsenSys refers to incubator (or venture studio) part of its business as ConsenSys Labs, and says that this "incubates the best teams of Web3 across the globe, providing them capital, mentorship, and access to ConsenSys’s network of top-tier projects and talent." A few examples of the over 50 projects currently being incubated by ConnsenSys Labs are AirSwap, Civil, Gnosis, Infura, and MetaMask.

The Verge reports says:

"A term sheet reviewed by The Verge and given to at least two incubated startups within the company showed that ConsenSys is beginning to spin out its large portfolio of blockchain projects, often without the financial support they’d need to find outside funding and succeed. When reached for comment, a representative for ConsenSys did not deny that layoffs were impending, and only said that the company is speaking with every spoke and project to 'determine a path forward, whether that will be internally as a part of ConsenSys 2.0, or as an external entity.' The vast majority of people working at spokes are ConsenSys employees, and many spokes don’t yet have a revenue-viable product."

On December 6th, ConsenSys confirmed to Coindesk that was laying off 13% of its staff:

“Excited as we are about ConsenSys 2.0, our first step in this direction has been a difficult one: we are streamlining several parts of the business including ConsenSys Solutions, spokes, and hub services, leading to a 13% reduction of mesh members... Projects will continue to be evaluated with rigor, as the cornerstone of ConsenSys 2.0 is technical excellence, coupled with innovative blockchain business models."

In an interview with Coindesk on December 5th, Lubin had referred to the restructuring of ConsenSys as "a refocusing of priorities on more rigor, more structure, more sustainability, more accountability." He also said that his firm has been spending more time with external investors in order to “open up” fundraising opportunities for its startup ventures:

“Certainly one goal is to enable ConsenSys and its projects to not be dependent on the price of these value tokens, that essentially they are all thriving businesses in their own right."

Lubin also told Coindesk that ConsenSys wanted to change its focus for its ventures from cool to viable/profitable:

“We’ve definitely been more focused on doing cool things in the past, and now we’re just focused on being a set of viable and successful businesses in a real business ecosystem... Blockchain is getting very, very real. It’s about the maturation of the company.”

One source told The Verge that ConsenSys is "using the 13 percent announcement I would imagine to give comfort to potential investors about the small-scale downsizing."

Featured Image Credit: Photo via Pexels.com

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Coinbase Quietly Pulls the Plug on Its Cryptocurrency Bundle Product

Francisco Memoria

The San Francisco-based cryptocurrency exchange Coinbase has quietly pulled the plug on its Bundle product, which allowed users to buy a basket of cryptocurrencies with fiat.

According to an update on its FAQ page, the cryptocurrency exchange “deprecated” the Coinbase Bundle product, and all assets in it have been “redistributed to their respective individual asset wallets.”

The move, first spotted by Crypto Briefing, is believed to have been made because the product wasn’t a profitable one. Coinbase Bundle was launched back in September of last year to make it easier for investors to gain exposure to the cryptocurrency ecosystem, through a weighted basket of the cryptocurrencies the company then offered.

This means users could use a small amount of fiat to buy bitcoin, litecoin, ethereum, bitcoin cash, and ethereum classic at once. Per the exchange itself, the bundle’s purpose was to “make buying more convenient and less overwhelming.”

At the time, the exchange also launched other features: Coinbase Learn and new asset pages.

The timing was off, however, as the product was launched during the bear market that saw the price of most cryptocurrencies drop well over 80%. Images shared on social media in December of 2018, when bitcoin hit its $3,200 low, showed investing $100 on Coinbase would’ve led to significant losses only a few months later.

As covered, Coinbase recently launched a service offering its users four free exclusive “trading signals,” in a bid to help its customers “independently create and manage their own crypto strategy.”

It’s worth noting Abra, a digital asset exchange and wallet provider,  launched a product packaging various cryptocurrencies into one at about the same time Coinbase launched its Bundle product. Abra’s product is its BIT10 token.