Loom Network blames Coronavirus for slow development following exit scam accusations

  • Earlier, the CEO of Loom and several of the network’s validators had abandoned the blockchain project. 
  • Following this, Loom became inactive on social platforms that it was earlier active on, such as Reddit and Telegram. 
  • This caused many users and crypto experts to speculate that Loom was an exit scam. The firm says otherwise. 

Details regarding the operations of Loom Network, a platform-as-as-service (PaaS) blockchain initiative, remain unclear. After the departure of the project’s CEO, the network announced that it would be switching from its original business model into an enterprise-facing solution. 

In the weeks following that, multiple Loom Network’s validators abandoned the project as well. Loom was no longer active on social media platforms such as Telegram, Reddit, and a company blog. This caused many users to speculate whether Loom was an exit scam. Bruno Skvorc, manager of blockchain and crypto education site, Bitfalls, had tweeted:

Rip $loom

- telegram shut down
- reddit dead
- blogs silent
- core team gone

I'd call it an exit scam if there was anything left to exit with. [email protected]

However, in an interesting turn, representatives from the Loom blockchain platform have confirmed that the project is active and well, according to a Cointelegraph report. 

We haven't gone anywhere, and the chain is still operational. Our developer telegram group and subreddit are still open.

Loom recently posted an official update on Telegram, discussing the firm’s immediate priorities and updating users regarding the status of the project. The network noted that the costs of providing technical support and grants to the developers and validators had become a financial burden. 

After a year from the launch of their Basechain, they noted that “many developers and some validators asked us to provide them with additional funding,” adding that “we were having to outbid other infrastructure projects in this space via subsidies just to maintain the status quo.” When it became clear that this situation was no longer sustainable, validators began to leave for competing projects, according to Loom.

Loom also noted that the economic crisis caused by the Coronavirus pandemic played a role in its decision to update their business model.

Globally, we are facing one of the worst economic downturns and an epidemic that has infected more than a million people. Our plan for the future has to take this into account, and we must pivot our products into a space where they can generate revenue to offset our expenses.

According to Loom, Basechain was updated twice during the month of April. An excerpt from their Telegram post says:

We believe most crypto companies will have to find more profitable product spaces. We are moving there as one of the first again, just as we were one of the first companies to have a scalable sidechain.

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