Charles Hoskinson, the founder of Cardano, has come to the defense of several blockchain networks, including Tezos, Stellar, and XRPL, following a critical article by Forbes labeling them as “crypto zombies.” The Forbes article scrutinized over 20 crypto projects with a market cap exceeding $1 billion, highlighting their lack of developers, users, real-world applications, and substantial value. The article sparked outrage within the industry, leading industry leaders to refute the allegations and defend their respective projects.
Forbes conducted an investigation of the top 50 blockchain networks, ranking them based on metrics such as monthly active developers, fees generated, total value locked, and market cap-to-fees ratio. The conclusion was that many of these projects were solely driven by speculation and lacked substantial value. Among the projects targeted were XRP and Cardano, collectively valued at $59.3 billion, along with Stellar, Stacks, Bitcoin Cash, Litecoin, Fantom, Algorand, Tezos, and EOS.
In response to the article, Charles Hoskinson took to Twitter to dismiss the attack on his project, suggesting that the zombie comparison was due to the projects having “all the brain.” Other supporters of XRP also criticized the article and its author, questioning why the SEC would target Ripple if XRPL was a dormant chain with no users.
Emir Yavuz of Ultra Stellar defended the Stellar network, expressing disappointment with Forbes’ lack of proper research and engagement with the community. Yavuz also highlighted Stellar’s recent achievements, including tokenization of assets such as WisdomTree’s $365 million worth of tokens on the network.
While some within the crypto community agreed with the article’s contents, including journalist Laura Shin, who praised it as an “excellent story,” there were others who concurred with the attacked projects. Bob Summervill of the Ethereum Classic Cooperative acknowledged that ETC’s listing on various platforms was largely due to its history, resulting in speculative trading activity.
Forbes heavily criticized Ripple for its failure to compete with SWIFT in global money transfers and losing market share to more efficient stablecoins. The article also questioned Ripple’s treasury holdings of over $20 billion in XRP tokens. The ratio of market cap to fees was another metric highlighted, with XRP’s ratio being significantly higher than that of Nvidia, a major tech company.
The article also highlighted the fundraising and hoarding of funds by many of the “crypto zombies,” with Ripple holding $24 billion in XRP tokens for periodic release and sale to fund operations. Matt Hougan of Bitwise Asset Management likened this practice to early-stage venture capital funds or companies that raise excessive funds without knowing how to deploy them effectively.
In conclusion, the Forbes article labeling certain blockchain projects as “crypto zombies” has sparked controversy within the industry, with supporters and leaders of these projects defending them against the allegations. The article raised important points about the lack of development, users, and real-world applications in some crypto projects, as well as questionable practices such as excessive fundraising and hoarding of funds.
