Cosmos-Builder Ignite Cuts Headcount by More Than 50%, Ex-Employees Say
The reductions come amid a crypto market crash, and after the return of Ignite’s controversial ex-CEO.
Ignite, the company that originally founded the Cosmos blockchain ecosystem, has parted with more than half its employees this week, two ex-employees and a source close to the company told CoinDesk.
The news came after Ignite CEO Peng Zhong announced on Friday he would be leaving the company. According to one of CoinDesk’s sources, Zhong was also joined by other top executives at the firm. Against the backdrop of a contentious re-organization, the high-profile exits at Ignite place the firm’s future in question.
Ignite laid off some employees, and others volunteered to leave the company in return for severance packages. The firm joins other crypto companies hit hard by the sector’s recent collapse, including BlockFi, Coinbase (COIN) and Crypto.com. But according to CoinDesk’s sources, Ignite’s workforce cuts stemmed not only from recent market conditions but internal factors.
According to the two ex-employees who spoke to CoinDesk on the condition of anonymity, the potential for cuts was first announced by former Ignite CEO Jae Kwon when he returned to the company in May.
Kwon, one of Cosmos’ original creators, founded Ignite (then called Tendermint) and its parent company, All In Bits, Inc., in 2014. Kwon stepped down as Tendermint’s CEO in 2020 after a widely publicized dispute with some of its employees, but he retained a seat on the All In Bits board. In May, CoinDesk reported that Kwon would be returning to the company as the CEO of New Tendermint, an Ignite spin-off focused on some of Kwon’s side projects.
According to CoinDesk’s sources, when Kwon announced his return at a company all-hands in May, he said severance packages would be offered to some employees.
According to one of the ex-Ignite employees, details about the new organizational structure between Ignite and New Tendermint remained vague for several weeks after they were announced.
Employees were invited to apply to work at New Tendermint, Kwon’s new venture, said the ex-employee. Those who did not apply were told they would be invited to join a reformulated version of Ignite, or a new initiative called Cosmos Cash. According to the ex-employee, Kwon clarified that not all Ignite employees would make the cut.
The crypto crash in June forced Kwon to slash numbers further than originally anticipated, the person said.
CoinDesk has reached out to Kwon for comment but has not heard back.
CoinDesk has reviewed a spreadsheet listing over 50 ex-Ignite employees from multiple departments who were laid off or voluntarily accepted severance packages. According to CoinDesk sources, the list was circulated to other Cosmos-based projects who might be looking for workers, and the number of people who have left or are leaving the company could total over 100.
Before these departures, Ignite’s headcount was around 140.
A Re-brand, a Re-org and a Re-structuring
In February, Ignite rebranded from its original name, Tendermint. Then-CEO Peng Zhong told CoinDesk at the time the rebranding was meant to signify a shift in strategy for the firm, which had historically focused on building backend infrastructure for the Cosmos ecosystem.
The Cosmos ecosystem is a community of inter-connected blockchains that can easily send assets back and forth. It made headlines this week with the announcement that dYdX, a leading crypto exchange platform, will be leaving Ethereum in favor of its own Cosmos-based blockchain.
Today, most of Cosmos’ core infrastructure is maintained by a broad community of teams and companies other than Ignite. With the rebrand from Tendermint, Zhong said Ignite would place the bulk of its focus on Emeris – the firm’s Cosmos-based crypto investment hub.
Ignite announced Friday that the development of Emeris was “On Hold."
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