During an interview with XCong.com, Xinxi Wang, a board director of the Litecoin Foundation, revealed that they will launch a crowdfunding platform to propel the development of new projects within the ecosystem. In such a way, the foundation will also increase the transparency of its fund management.
A financial struggle
The interview mainly addressed the questionable financial situation of the organization. On average, the Litecoin Foundation receives about $1,000 in monthly donations, which is rather low for a project of such a big scope.
However, according to Wang, it doesn’t necessarily mean that the community’s enthusiasm has fizzled out given that the crypto bears were to blame for the meager numbers.
I don’t think there is a correlation between donations and enthusiasm. First, we did not actively solicit donations from the community in Q1. Second, the price of Litecoin was low, so the same amount of Litecoin donations were worth less than before.
The situation seemingly improved during the second quarter when Bitcoin’s rally marked the end of the bear market. The Litecoin price reached a whopping $140 back in June.
In Q2, we received hundreds of thousands of dollars worth of donations.
The exodus of miners
Wang also weighed in on an eye-popping 40 percent hash rate drop, which followed the recent halving event that took place on Aug. 5. A significant number of miners had no choice but to jump ship after the block reward was reduced from 25 to 12.5 coins.
The decrease in hash rate makes the network more vulnerable to a possible 51 percent attack, but Wang insists that Litecoin is still “very secure.”
The price drop also contributed to the hashrate drop. Miners using old rigs could be losing money and thus stopped mining. However, Litecoin is still very secure.