NEM, its entities, what they do and how they interact
Following recent media coverage of the NEM Blockchain. It was apparent there are misconceptions about how the ecosystem works, where it is funded from and which entities do what. In response to these questions, we have provided a basic guide here.
The image below is very high level but shows the constituent parts, of which NEM Ventures is one.
The NEM technology and its development, is independent of any of the legal entities you may see speaking on behalf of the community. All the entities could cease to exist and the project would continue independently of them.
NEM started as a call for participation in 2014. It attracted various parties; the current core developers among those. The first version (NIS1) was released in 2015. The new version (Catapult) is being developed actively at present and is currently available in Beta for Private Chain deployment. Public Chain launch is expected in 2019.
Upon launch the XEM tokens were distributed:
- To interested stakeholders for a nominal value, no ICO occurred.
- To reserved pools, for specific uses later, which are controlled via on-chain multi-signature functionality by various long standing and trusted members of the community.
Those tokens have a value due to a combination of trading on utility token exchanges and them being used as the transaction fee mechanism. The Public Chain and associated tools receive work from the Core Developers, Projects, the Community and the Centre of Excellence (CoE) developers.
There are three primary entities, they are legally separate organisations with distinct reasons for existing. However they, collaborate on numerous initiatives for the benefit of NEM and providing development requirements.
Tech Bureau fund the Core Developers costs, own and operate an enterprise licence for Mijin – a private chain implementation. Mijin contains functionality not available on the Public Chain.
This is different to deploying NIS1’s public code base as a private chain, which is also possible. Tech Bureau is self funding and is a private Japanese company that implements Mijin for commercial customers.
NEM Foundation; created in 2016, ~2 years after the Public Chain launch. It was funded from one of the reserved pools. It is a Company Limited by Guarantee in Singapore. Its early focus was on brand awareness, marketing, training and partnerships. In late 2018 the first council’s term came to an end and a new council was elected by members.
The new council are focused on supporting Catapult release, Governance and Sustainability. They are restructuring at present to achieve this. The council are due to submit a public proposal for public vote in 2019 to receive a mandate to access further funding from the reserved pools.
NEM Ventures, the newest member of the ecosystem. Created in 2018 by a small, highly motivated team. We are mandated by the community to improve management of the Community Fund. Previously, a grant system run by volunteers, this has transitioned to a modern Blockchain Venture Capital firm. We are in the process of making our first investments along with multiple exciting partnerships and initiatives we hope to share soon. We are a holding structure registered in Gibraltar:
- NEM Community Trust: A purpose trust that lives in perpetuity for the good of NEM, it is funded at present from the Operating Costs Fund and mid-longer term will absorb the NEM Community Fund
- NEM Holdings Ltd: A company limited by guarantee, with one member (the Trust above). It is primarily a governance layer with a board of directors responsible for ensuring subsidiary companies operate within their mandate but little operational activities.
- NEM Ventures Ltd: A company limited by shares, owned by NEM Holdings Ltd which manages the community assets and invests in commercially viable projects within the NEM ecosystem.
The focus is on commercially viable projects that utilise or benefit the NEM ecosystem and XEM adoption.