The once much-heralded blockchain software company and Ethereum-focused incubator with a decentralized platform for applications and a cryptocurrency based on Ethereum (Ether) appears to be on shaky ground.
When Ethereum’s value rose 13000 percent in 2017, with the price of the ETH token hitting a record $1400 plus, – that meteoric rise made Joe Lubin, its founder, one of the richest men in crypto. According to Forbes, his net worth was between $1 and $5 Billion.
But wait. What happened in 2018? There were big plans about spinning off its startups in 2018 of last year which meant layoffs with as many as 50-60% of the employees being let go. Consensys was vying for traction. It was rumored that many businesses were started where 51% was taken from founders. Those businesses (can you name?) are failing and cannot raise money both because Consensys doesn’t want to fund them and other investors felt the deals were top heavy in Consensys’ favor.
Consensys generated top-line revenue of $21M during 2018 yet recent leaks in the media state that it had an annual burn rate of $100M – spending 5X what it was making. Lubin recently announced that ConsenSys was raising $200M from outside investors at a $1B valuation – What happened?
No doubt, Etherium has been faced with its own challenges, namely its attempt to migrate from Proof of State to Proof of Work. Unlike 2017, there are new and competing distributed ledgers who promise to surpass and improve what was once heralded as the standard.
The year 2019 will be an interesting one all around buy eyes are on the previously high and mighty. Will Lubin be able to raise the $200M from outside investors? This remains to be seen.