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The number of tokens exceeds 14,000 and the crypto market cap stands at $2.4 trillion, but more is not always possible. Forbes identified a group of 20 cryptos, nicknamed “zombie blockchains,” that maintain high stock market valuations despite little or no real-world utility or user adoption.
The list includes well-known names such as Ripple (XRP), Cardano (ADA), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum Classic (ETC), all of which are characterized by their continuous operation and trading without fulfilling their obligations. practical purposes.
The term “zombie blockchains” refers to blockchain projects that, like the undead, exist but show no signs of life in terms of utility or substantial user bases.
These tokens continue to exist and sometimes even thrive financially because of speculative trading and substantial initial funding rather than because they have achieved their technological or practical goals.
Forbes analysts noted that Ripple's XRP was initially designed to compete with the SWIFT banking network by facilitating fast international bank transfers with minimal fees. However, it failed to disrupt SWIFT and now relies largely on speculative trading for its high market value, with minimal revenue coming from actual use of the network.
“It's largely useless, but the XRP token still boasts a market value of $36 billion, making it the sixth most valuable cryptocurrency,” the analysts described.
“Ripple Labs is a crypto-zombie. Its XRP tokens continue to trade actively, worth around $2 billion per day, but for the sole purpose of speculation. Not only is SWIFT still going strong, but there are now better ways to send payments internationally via blockchains, particularly stablecoins like Tether, which is pegged to the US dollar and has $100 billion in circulation,” they added.
Similarly, according to Forbes, hard forks like Litecoin, Bitcoin Cash, Bitcoin SV, and Ethereum Classic are valued at over $1 billion but are underutilized, serving more as speculative investments than practical applications.
These tokens often arise from disagreements within developer communities and persist due to their historical importance or the inertia of speculative trading.
“What keeps these zombies alive is liquidity,” the analysts cited a VC statement.
Analysts have also pointed to “Ethereum killers,” such as Tezos (XTZ), Algorand (ALGO), and Cardano (ADA), as being a significant part of this phenomenon.
Despite technological advancements and substantial valuations, these tokens have not seen major adoption or activity. Although they offer advanced transaction processing capabilities, they struggle to convert these capabilities into widespread acceptance or developer engagement.
“Some blockchain zombies seem to trade solely on the popularity of their creators. Cardano, another Ethereum competitor, launched in 2017 after its co-founder, Charles Hoskinson, fell out with Buterin, his Ethereum co-founder,” analysts have suggested that speculative interest in Cardano is primarily driven by the importance of its founder.
The Forbes report also addresses the lack of governance and financial accountability mechanisms in these blockchain entities, which operate without regulatory oversight or obligations to shareholders. This complicates efforts to assess their viability or financial health, as seen in cases like Ethereum Classic, which continues to be actively traded despite major security vulnerabilities.
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