Ethereum Not Looking So Hot After ConsenSys Announces Layoff Numbers

Not long after ConsenSys founder and CEO Joseph Lubin told BREAKER about its plans to “reorganize,” the Ethereum-focused company got concrete about layoffs. As per its announcement on Thursday, ConsenSys is going to reduce the “mesh” (the collective name for its employees) by 13 percent. With around 1,200 employees, that’s roughly 156 people out of a job. (Full disclosure: Lubin is one of four cofounders of BREAKER’s parent company, SingularDTV.)

This has elicited plenty of reactions, many that reflect on Ethereum, the network ConsenSys has worked so hard to make itself synonymous with. (In a November interview with BREAKER, ConsenSys CMO Amanda Gutterman said, “That’s good, you should be confusing them,” when I slipped up and called ConsenSys “Ethereum.”) Lubin has long talked a big game about how there’s no reason to worry about ConsenSys’s sustainability, but Forbes recently estimated that the majority of its businesses have spent more money than they’ve made—an estimate that’s looking accurate based on yesterday’s layoffs.

The answer is, always, the egg. Eggs existed well before chickens. But if the chicken is trying to be the egg, then all bets are off.

Some commented by (jokingly?) directing the people whom ConsenSys laid off to Ripple, which is apparently hiring. XRP’s market capitalization now exceeds Ethereum’s by over $3 billion, representing the current state of the most enduring “rippening” (when XRP exceeds ether’s market capitalization) to date.

It’s kind of a “chicken or the egg” question. Is ConsenSys  (the “chicken” in this not-tortured analogy) contributing to the falling price of ether, or is ether’s falling price causing ConsenSys’s layoffs? The answer is, always, the egg. Eggs existed well before chickens. But if the chicken is trying to be the egg, then all bets are off.

Others are harkening back to the bet Lubin made with bitcoin maximalist Jimmy Song back in May 2018. Lubin wagered “any amount of bitcoin” that five years from then, there would be around five different decentralized applications with significant user numbers (besides bitcoin).

Largely, though, people are watching to see whether anyone invested in the Ethereum blockchain, not just ConsenSys, is sweating. Someone even wrote an Eminem-inspired rap about it that, in addition to Lubin, references Vitalik Buterin and Coinbase CEO Brian Armstrong.

Meanwhile, ConsenSys is putting on a brave face. Its Medium post from Thursday reminds readers that “price isn’t the whole story,” pointing to all kinds of hopeful numbers, like the 240 million transaction increase across the Ethereum network since June. There’s been “relative [price] stability” (prices have been reliably lower than they were earlier this year, it’s true), and now there are almost 49 million unique addresses on the blockchain, ConsenSys writes. That’s the spirit—and a show that Lubin hasn’t quite lost the bet to Song, yet.