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Forbes lists XRP, ADA, LTC, ETC among the top “zombie” tokens.
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The number of tokens exceeds 14,000 and the cryptocurrency market capitalization stands at $2.4 trillion, but more may not always be nicer. Forbes he identified a group of 20 cryptocurrencies, dubbed “zombie blockchains,” that maintain high market valuations despite showing little to 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 characterized by their continuous operation and trading without fulfilling practical purposes.
The term “zombie blockchain” 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 due to speculative trading and substantial seed 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 quick international bank transfers at minimal fees. However, it failed to upset SWIFT and now relies heavily on speculative trading for its high market value, with minimal revenue coming from actually using the network.
“It is largely worthless, but the XRP token still has 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 be actively traded, worth around $2 billion per day, but for no purpose other than speculation. Not only is SWIFT still going strong, but there are now better ways to send payments internationally via blockchain, especially stablecoins like tether, which is pegged to the US dollar and has $100 billion in circulation,” they added.
Likewise, hard forks such as Litecoin, Bitcoin Cash, Bitcoin SV and Ethereum Classic are valued at over $1 billion but are underutilized and, according to Forbes, serve more as speculative investments than practical applications.
These tokens often arise from disagreements within developer communities and persist due to their historical significance or the inertia of speculative trading.
“What keeps these zombies alive is liquidity,” analysts quoted in a VC statement.
Analysts have also pointed to “Ethereum killers,” such as Tezos (XTZ), Algorand (ALGO), and Cardano (ADA), as a major part of this phenomenon.
Despite technological advancements and substantial valuations, these tokens have not seen significant adoption or activity. While they offer advanced transaction processing capabilities, they have difficulty converting these capabilities into widespread acceptance or developer involvement.
“Some blockchain zombies appear to trade solely on the popularity of their creators. Cardano, another Ethereum competitor, was launched in 2017 after its co-founder, Charles Hoskinson, had a falling out with Buterin, his Ethereum co-founder,” analysts suggest that speculative interest in Cardano is primarily driven by importance of its founder.
The Forbes report also touches on 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 suffering major security breaches.
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