Steemit, the company behind a blogging website that uses the Steem blockchain and cryptocurrency to reward publishers and curators, announced that it is undergoing a structural reorganization. As a result of the reorg, Steem will layoff close to 70% of the team.
Steemit said the move is a result of the weakness of the cryptocurrency market. Recently, the fiat returns on the automated selling of its native cryptocurrency STEEM diminished, while the costs of running full Steem nodes increased. Steemit will now focus their efforts on reducing operating costs of the product.
STEEM, which has lost 96% from its all-time-high, is currently the 47th largest cryptocurrency according to CoinMarketCap. It has long been lauded as one of the few working products supported by a cryptocurrency. The project’s troubles will surely call into question the current feasibility of running projects with real operating costs on top of cryptonetworks with highly volatile cryptocurrencies.