Ethereum Development Studio ConsenSys To Be Halved
ConsenSys, the Ethereum-centric development consortium founded by one Joseph Lubin, has long been at the forefront of this nascent industry. Since it was founded [basically] in tandem with Ethereum’s launch, the distributed startup has been an integral element of the network’s development since block one.
Yet, after a multi-year run of little-to-zero hiccups, the development initiative, headquartered in New York, has begun to stumble amid 2018’s crypto market action. Just weeks ago, Lubin, one of the multiple Canadian technology entrepreneurs that co-founded the Ethereum project, laid off 13% of its ~1,200 staffers to move one step towards ConsenSys 2.0, a likely playful jab at Serenity.
In a letter given to ConsenSys’ “spokes,” a name given to the startups under the firm’s patronage, Lubin, who roomed with Mike Novogratz at Princeton University, explained that his firm needed a “streamlined rocket ship” to accomplish his dreams.
Although the 13% cut seemed to be the end of ConsenSys’ short-term qualms, especially considering Lubin’s assumed net-worth of $200m+ (he financially backs the spokes), reports indicate that the company isn’t in the clear.
Per an exclusive report from The Verge, ConsenSys is in the midst of spinning out some of the 36 startups under its wing. Insiders speculate that its 1,200-part workforce could be cut in half in coming months, potentially reducing the company’s (speculated $100m/year) burn rate by a similar percentage.
ConsenSys plans to spin out most of its startups, and it’s going to mean layoffs https://t.co/TXRcalLb7u pic.twitter.com/hvvzSO3gi4
— The Verge (@verge) December 20, 2018
Citing official documents, which somehow fell into the hands of The Verge’s Bijan Stephen, it was explained that ConsenSys will be cutting ties with “a large portfolio” of its spokes, and won’t be providing sufficient severance. When the outlet reached on to ConsenSys for a comment, the representative could neither confirm nor deny that the layoffs were nearing, only noting that the firm’s top brass is in deep discussion with startups.
Sources claimed that the company is looking for investors, making this potential layoff likely a byproduct of this search.
While prospects seem dismal for the Ethereum-friendly group, it was explained that some of Consensys’ spokes will likely remain fully intact, contrary to rumors. Per those familiar with the matter, “core Ethereum tools” will continue to operate in their current state. Such tools include Infura, MetaMask (the popular Ethereum wallet and dApp client), Alethio, Kaleido, and Truffle. For a majority of the other spokes, ConsenSys will be starting an “accelerate spin out” process, whereas two months of severance will be forked out, or partial equity, partial cash deal will be struck.
In transcripts obtained from a private Slack group, these deals, which are far from advantageous for startups, were confirmed, with one anonymous developer seemingly exclaiming how unfair the proposed deal was.
Sources also expressed their disbelief, with some noting that the organization had begun to fire people left and right. He/she/they remarked:
The office is empty, people are only finding out who’s getting fired because you try to to send Slack messages and they’re not there… They were firing people they had hired two weeks beforehand. They were firing people who were pregnant. Whose wives were pregnant.
ConsenSys has yet to publicly comment on this second round of brutal purges.
Crypto Community Reacts
As this news spread, the crypto community at large began to react to this news. Bob Summerwill, a Canadian crypto entrepreneur and a well-known Ethereum community member, expressed his condolences while stating that ConsenSys is likely to overcome this short-term bout of pain.
Best wishes to all my friends at @ConsenSys! Love and hugs ❤️
In late 2015, the EF nearly ran out of money. There will always be ups and downs in frontier technologies. I would not change my own journey for anything. It has been the ride of a lifetime.#ethereum #community pic.twitter.com/AZU2xDEumR
— Bob Summerwill (@BobSummerwill) December 20, 2018
Mike Dudas, the founder of The Block, claimed that he has made an offer to a former ConsenSys employee, obviously trying to mitigate the loss of jobs. Spencer Noon, an industry commentator, noted that this layoff isn’t bearish for ETH, as the startup isn’t trimming its core tools. Still, Ryan Selkis, CEO of Messari, probably put it best when he said the ConsenSys remains a “grand experiment,” but maintained that the firm has and will play a key role in this industry.