Fears that the IOTA Foundation could run out of financial reserves have been further fuelled by the recognized agency Weiss Crypto Ratings. She warns in a Tweet. Members of the board of directors of IOTA reacted angrily and cautionary.
Already at the beginning of the week the news went around: The IOTA Foundation is suffering from financial problems, the known reserves will only last until August 2021. Independently of this news, a developer who left IOTA in May had already calculated that the capital would become scarce and that the running costs would be used up in mid 2021. Now the renowned experts from Weiss Crypto Ratings are taking the same line and writing on Twitter: “IOTA is at risk of running out of money, aggravated by a lack of commercial use cases in the tangle.
#IOTA is at risk of running out of cash, exacerbated by lack of commercial use cases of #Tangle. As second layer apps improve, the ever-growing #crypto community is ditching protocols it doesn’t want/need. Maybe IOTA is one of those projects, destined to fall by the wayside?
— Weiss Crypto Ratings (@WeissCrypto) August 27, 2020
Only this time the IOTA Foundation is responding to the discussion by sending the co-founders Dominik Schiener and David Sønstebø. Schiener writes laconically, “What are we talking about here? IOTA is one of the few projects that receives funds through government programs and through cooperation. Sønstebø takes a much more rustic approach and throws into the ring the thesis that the Twitter account was hacked by Weiss Crypto Ratings. He claims that the IOTA Foundation is funded for at least another five years.
The finances of the IOTA Foundation – what is known
Let us note: The developer with insider knowledge was the first to warn about imminent shortage of money at the IOTA Foundation. The analysis from a week ago lists the publicly known accounts at IOTA and calculates transparently that on this basis there will soon be low tide in the coffers. Weiss Crypto Ratings has no interest in banning false news about IOTA and thus damaging its reputation. The agency is committed to clients and has downgraded the outlook for IOTA from B+ to C+.
And what does the IOTA Foundation do? It denies without presenting any evidence to the contrary. However, Schiener and Sønstebø should know that financing problems for their project can deter investors and cooperation partners. It should be easy for them to clear up the bad rumors with concrete figures – if they are only rumors. But this has still not happened, and IOTA boss Sønstebø is instead lashing out with accusations against others, in his choice of words close to abusive.
So it is hardly surprising that from the sidelines, the self-proclaimed IOTA scout “Dog” also posts his words on Twitter. His tenor: The rapid shrinking of IOTA’s money reserves is old hat and has been known to interested parties for months. Special attention should therefore be paid to the mechanisms of the IOTA Foundation’s external communication. In the case of criticism, the IOTA Foundation always follows the pattern of denying everything polemically and not contributing anything to a serious clarification, even when it comes to detailed lists of problems.
Conclusion: IOTA Foundation obviously in financial difficulties
Several external IOTA experts come to the independent conclusion that the financial situation at IOTA is getting tight and that financing for summer/autumn 2021 is not secured according to the information available. Weiss Crypto Ratings goes as far as to say: “Maybe IOTA is one of those projects that is destined to fall by the wayside? And apparently they have hit a sore spot with the IOTA Foundation, which does not provide any evidence to refute a skew in the accounts. As an investor, one quickly becomes suspicious, especially with the background knowledge that there is still a lot of work to be done in the technological renewal towards IOTA 2.0 aka Coordicide and the corresponding financial requirements.
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