IOTA and Shimmer: Conflict between foundation and community boils over

In the IOTA ecosystem, including Shimmer (SMR), there is a dispute between the community and the official foundation headed by Dominik Schiener. The rift is evident in the handling of IOTA referendums and voting rights.

Dominik Schiener, head of the IOTA Foundation, has had to endure fierce criticism. The bone of contention are four referendums on self-administration via the Tangle Community Treasury. Last week, we reported that these votes were in danger of failing due to a lack of voter turnout. But in the end, the IOTA Foundation stepped in and exercised voting rights in order to achieve the quorum of 5 percent. At first, Schiener was applauded for this on X.

But in retrospect, the situation is more complicated. As Digidus the DeGenX, for example, explains, the IOTA Foundation deliberately omitted a vote. This was to determine the leadership of the Tangle Community Treasury and only the incumbent JD Sutton from the Deep Sea project was up for election. According to Digidus the DeGenX, because Schiener ordered the IOTA Foundation not to participate in the referendum on this personnel issue, it failed to achieve a quorum.

In fact, Schiener gives the explanation documented here for the strange voting behavior. According to Schiener, JD (Sutton) had conducted a campaign against the IOTA Foundation and himself. For this reason, the working relationship with JD was completely terminated and it was decided not to exercise any voting rights in the vote in question. According to Schiener, it would be better to be grateful to him and the foundation for having secured the fundamental continuation of the Tangle Community Treasury.

IOTA Foundation and Schiener block the community’s decision

But is that the whole IOTA truth? Digidus the DeGenX recalls a conflict of interest that already came to light in the late summer of 2022. Schiener appears to be personally and financially linked to Nakama Labs, a direct competitor to JD’s Deep Sea project. It therefore seems as if Schiener does not want to allow any competition for the IOTA Foundation and its allies. According to Digidus the DeGenX, this does not make a good impression from the perspective of a decentralized ecosystem.

One thing is clear: Schiener has the unrestricted say at the IOTA Foundation and could not bring himself to support the will of the community by actively abstaining from voting. The community had voted with more than 90 percent of the votes cast in favor of JD Sutton’s re-election and the IOTA Foundation’s vote would have made this referendum valid. Meanwhile, JD Suttton expressed his disappointment with the development on X, but does not want to add fuel to the fire.
In general, the IOTA referendums were not under a particularly good star. Trial votes met with a negligible response and there are also questions about the quorum itself. This is because the total amount of all IOTAs was massively increased last year (keyword: inflation hammer) and this also shifted the balance of power between the foundation and the community in favour of the organization led by Schiener.

Conclusion: IOTA Foundation with Dominik Schiener risks a break with the community

Schiener regularly assumes responsibility and makes decisions for IOTA without open discussion, which repeatedly leads to public dissonance with the community. The Tangle Community Treasury should actually also be an expression of a self-confident community that can provide support for projects that do not find favor with the IOTA Foundation. Schiener had the opportunity to act diplomatically here and simply help the referendums over the 5% hurdle with the help of the foundation – without exerting any influence on the content. Instead, however, a new source of conflict has flared up between the IOTA Foundation and the community, which also conveys the feeling that self-administration and co-determination in the IOTA ecosystem are only desired by the Foundation according to Schiener’s rules.

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