The value of blockchains has skyrocketed along with Bitcoin, with over 50 blockchains now worth over $1 billion each, despite many having low user activity. Ripple Labs, creators of XRP, aimed to revolutionize global financial transactions but have seen limited success. Despite its lack of utility, XRP remains the sixth most valuable cryptocurrency with a market value of $36 billion.
Many other blockchains, dubbed “zombie blockchains,” exist with high market values but little to no real-world functionality. These blockchains, including spin-offs of Bitcoin and Ethereum, have significant treasuries but lack users. Despite their limited usage, these blockchains continue to see high trading volumes, mainly due to speculation. These projects have struggled to attract developers and have minimal transaction fees.
Bitcoin Cash, Litecoin, Monero, Bitcoin SV, and Ethereum Classic are examples of spin-off blockchains worth billions but with limited utility. These blockchains exist due to disagreements among developers and lack significant user adoption. They continue to trade based on liquidity and popularity of their creators, such as Charles Hoskinson of Cardano.
Challenger blockchains like Tezos and Algorand, aiming to improve upon Ethereum’s technology, have high market values but limited user activity. These blockchains have raised significant funds through initial coin offerings but have not seen widespread adoption in the crypto space. Despite struggling to attract users, these projects continue to see high market values based on speculation.
While shorting zombie blockchains may seem like a lucrative opportunity, it is challenging to borrow significant amounts of these tokens for short selling. The volatile nature of the crypto market and potential for sudden shifts in demand make it a risky endeavor. The regulatory environment for crypto projects is also uncertain, with some projects facing lawsuits for acting as unregistered securities brokers.
Blockchain zombies continue to operate with billions in their treasuries, funding long-shot projects and speculative ventures. Despite their lack of real-world utility, these projects continue to attract investors and traders due to high liquidity and speculative interest. As the crypto market continues to evolve, the fate of these zombie blockchains remains uncertain, with potential regulatory challenges on the horizon.