In the upsurge of the cryptocurrency and blockchain buzz across the world, numerous companies have involved in such business as well to capture the profit of this booming market. However, not all of the startups of this kind are successful, as the case of the NEX group’s blockchain Project Infinity showed. The startup that emerged in 2017 with optimistic prospects but ended with a grand 2018 failure, massive loss of jobs for hundreds of employees, and a major loss of crypto-investors’ confidence. A seemingly promising project with optimistic forecasts, Infinity fell flat on its face recently, and the public is pondering over the reasons that led to that. Is the failure of NEX of blockchain-related nature? Or did internal management make mistakes and failed to find the best talent on NEX job openings? Let’s clarify the situation by analyzing the storyline of Infinity’s crash.
NEX Group, formerly known as the ICAP, is a decentralized platform enabling a variety of exchange and payment operations. The NEX exchange blockchain system proved more efficient than many other exchanges due to the unique off-chain matching engine, quicker transitions, and affordability of more complex multi-blockchain trade options. Due to such advanced functionality, NEX Neo blockchain offers, as well as its convenience for work with Ethereum, quickly gained it popularity among crypto-experts.
Infinity was launched in 2017 as the NEX blockchain flagship project intended to leverage AI in the NEX solutions and optimize the use of distributed ledger technology. The project was thought to enable easy connection with multiple trade and portfolio services in the field of crypto-trading and blockchain technology, which was expected to yield clients greater revenue by cutting their costs of operating in each of the exchange platforms. Thus, in simple words, Infinity emerged to reduce complexity of trade processes and optimize resource use across the blockchain transaction cycle.
The wrong strategy of the Infinity project resulted in a huge failure that cost the company $31.7 million and caused massive layoffs for the employees. The company was sold in March 2018 to the CME Group for $5.5 billion, which was seen as an optimistic business move. Nevertheless, that step presupposed taking a number of steps required before the sale, and one of them included large-scale cost-cutting. The NEX project blockchain cuts affected the Infinity project severer than it had been initially planned, which resulted in a quick disruption of its operation and a final failure.
Moreover, NEX’s impact on the blockchain was tremendous; NEX coin lost its attractiveness to investors, and the fate of the project is under serious question, with 47 out of 50 employees losing their jobs and transferring to other companies in the technology sector.
The reasons for Nex group blockchain failure are still unclear, and the company’s administration stays mostly silent amid the scandal and volatility caused by the problems in NEX. However, the dismissed employees shed some light on the causes for Infinity’s crash and shared their opinions about the NEX exchange blockchain failures.
First, one of the former NEX employees said that the company simply dropped the project and first fired its head, Jenny Knot, to leave the project without a leader. After that step, the NEX administration started preparing the company for sale to the CME group and implemented the cost-cutting strategy. What looked as cost-saving restructuring of funds’ allocation first in fact led to the project’s conservation just within months.
Thus, as it comes from confidential estimates of employees, the NEX CEO Michael Spencer initially did not mean to spend any more funds on Infinity, so he dropped its financing and fired 47 employees from it. This led to the absence of major project strategists and worsened the project’s status even further.
Other employees confided that Traiana is to blame for Infinity’s misfortunes, since this NEX division conducted infrastructure modernization for the project and took too much of the funds intended for the development and launch of Infinity.
Among other comments on Infinity’s future, one should consider the wrongful step of NEX’s administration to give proper meaning and value to Infinity; it was planned as large-scale modernization of the very structure and workflow of NEX, while management preferred to refer to it as “program,” thus having wrongful expectations and making wrongful financial estimates about it.
Apart from understanding what really happened, the global community is much more interested in whether Infinity really failed, and what the future holds for it. Initially aimed to revolutionize the trade processing world and give a new standard of efficiency, Infinity vanished without giving a shot in the market. Or didn’t it?
If we believe the words of Andres Choussy, the CEO of the Traiana division, Infinity is still alive and has entered the execution stage; the project is given physical form by the blockchain builder Axoni. Thus, Infinity seems to have chances to see the world, but with a considerably narrowed DLT implementation part. Upon financial restructuring and broad changes to the project, its management decided to give a greater emphasis to the post-trade FX features in Infinity. This happened because the DLT aspect appeared too complex and costly for NEX to implement and design, thus costing the lion share of the project’s financing and actually leading to the current financial misfortunes.
Thus, it seems that the rumor about Infinity’s failure even before market launch seem slightly exaggerated; maybe it will not get to the market in the originally planned form, but it will surely be realized according to the NEX clients’ expectations.