The slump in cryptocurrency markets is catching up on startups in the space. Steemit, the first social media and blogging platform launched on blockchain, laid off 70% of its staff recently. 

“While we’ve been building out our team over the last six months, we’ve been relying on projections of a higher market bottom,” said Ned Scott, co-founder of Steem. “Since that’s no longer there, we’ve been forced to lay off more than 70% of our organization.” After sliding for most of this year, the cryptocurrency market crash accelerated in November with bitcoin, the premiere cryptocurrency, dropping by 13% in a couple of hours. The overall valuation of cryptocurrency markets also fell below $200 billion.  

Steemit runs on the Steem blockchain and uses a “Proof-of-Brain” algorithm that is actually a Delegated Proof-of-Stake (DPOS) in which coins are distributed on the basis of stakes held by users. (This is different from Bitcoin’s Proof-of-Work algorithm in which nodes in its network solve cryptographic puzzles to earn coins).  Users earn Steem tokens to participate in and blog on the platform. In May, the company announced that its user count had surpassed 1 million. Users on Steemit earn STEEM, the platform’s cryptocurrency, by posting and interacting on the app. STEEM can be converted to bitcoin and ethereum and, subsequently, to fiat currencies.  

When the token was launched in 2016, it was among the top eight most-valuable cryptocurrencies. STEEM changed hands for $6.18 per token and touched a market cap of $1.5 billion at the beginning of this year during a surge in valuations for alt coins. As of this writing, it is trading at $0.39 and has a market cap of $120 million. In a post, cofounder Scott referenced the diminishing “fiat returns” on automated selling of STEEM as a reason for their decision to lay off staff.