News on October 11th, according to a public announcement by the Litecoin Foundation in the communityIncome and Expenditure ScheduleIt shows that the Litecoin Foundation (LF) is running out of money. Last year (2018-2018.6), the foundation’s income once exceeded 1 million US dollars. This year (2018.6-2019.3) the income for 9 consecutive months has shrunk to 70,000 US dollars.
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Donations shrink, business losses
According to the chart, the $1 million in revenue last year mainly came from donations of $830,000 and a net profit of $200,000 from the sale of goods; this year, donations have shrunk to $3,674, and commercial income has lost $80,000. This means that the foundation spent a higher sales cost of $280,000 than last year, but only made a profit of $200,000.
It is reported that the Litecoin Foundation was established in 2017. Since the ICO was not carried out, the Litecoin Foundation has been maintaining operations through a large amount of donations and business income from Litecoin founder Li Qiwei since its establishment. At the end of 2017, Li Qiweis donations accounted for more than 80% of the foundations total donations in the second half of 2017; but since Q1 2019, the Litecoin Foundation has received less than $1,000 in monthly donations.
In order to alleviate the situation, Wang Xinxi, the co-founder of the Litecoin Foundation, said in an interview that in order to help the Foundation overcome the difficulty of decreasing donations in the first quarter of 2019, the employees of the Litecoin Foundation voluntarily cut their salaries; After it was reported that there were only US$96,400 left in funds, the foundation received donations worth hundreds of thousands of US dollars in Q2 of 2019. In September of this year, the Litecoin Foundation plans to launch a project-based community crowdfunding system, similar to the one used by the Monero team, at a cost of 45 LTC.
Regarding commercial activities, it is not clear what their specific business is, but it is guessed that it is probably a T-shirt with the word hodl and their Litecoin Summit (Litecoin Summit). How it lost money in the T-shirt business is still a mystery, but the company still has a chance to make money, as the Litecoin Summit 2019 will be held on October 28-29.
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Labor costs and acquisitions account for the bulk of expenditure
Previously, Lee Qiwei revealed that the annual budget of the Litecoin Foundation is less than $100,000. So is it true? Where are the main expenditures of the Litecoin Foundation distributed?
From the actual data in the financial statements, it can be seen that this year, the foundation spent $137,000 on human resources, $36,000 on marketing, $24,500 on legal fees, and $4,500 on advertising; Compared with last year, costs such as responsible person fees, fixed income contributions, membership fees, and investment losses have been cut.
Even Franklyn Richards, director of the Litecoin Foundation, has stated that most of the foundations core team contributes to the project in their spare time; only a few core employees are paid for their work. Even the directors, including Richards, and Charlie Lee dont get any income from the foundation, but staffing costs are still a big part of the foundations costs; last year it cost more than $110,000.
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Development investment is not high?
Also, the foundation spent only $1,500 on software and cloud services, though it didnt say what was developed, which could just be their website.
There may also be no development costs. In August of this year, Li Qiwei told the foundation director Richards that the reality is that no one is interested in the development of the Litecoin protocol. At this time, Confidential Transactions (abbreviated as CT, Confidential Transactions) will be added to the future version of the full node implementation. But since then, little to no protocol development work has been done on Litecoin. This leads to a confrontation between Richards and Charlie Lee.
Richard once expressed his disappointment, and Li Qiwei said that basically no one can do it. Except for me, Warren and Thrasher. Richard retorted, Warren has moved to Blockstream, Thrasher went AWOL, and you?
Charlie Lee responded: Sorry, I dont care if people are disappointed that Litecoin hasnt made progress. In December 2017, Charlie Lee sold all his Litecoins at a high price and became a millionaire.
