Charles Hoskinson, the founder of Cardano, has come to the defense of Cardano and several other blockchain networks, including Tezos, Stellar, and XRPL, following a critical article by Forbes referring to them as “crypto zombies.”
Forbes harshly criticized over 20 crypto networks with a market cap of over $1 billion, stating that they have few developers, users, and real-world applications, and are primarily driven by speculation.
The article caused a stir in the industry, with many industry leaders defending their projects against the allegations. Forbes conducted an investigation on the top 50 blockchain networks, ranking them based on the number of monthly active developers, fees generated, total value locked, and market cap-to-fees ratio. They concluded that over 20 crypto projects with a market cap of over $1 billion are lacking substantial use and rely heavily on speculation.
The attack targeted popular projects like XRP and Cardano, which together are valued at $59.3 billion. Other projects on the list included Stellar, Stacks, Bitcoin Cash, Litecoin, Fantom, Algorand, Tezos, and EOS.
Leaders from these projects quickly dismissed the article and defended their projects. Charles Hoskinson took to Twitter to brush off the attack on Cardano, suggesting that the “zombie” comparison was because these projects have “all the brain.”
Panos Mekras, the founder of Anodos Finance, a project based on XRPL, described the article as “nonsense and misinformation.” He criticized the author for being misinformed and not conducting proper research.
Bill Morgan, a pro-XRP crypto lawyer, questioned the SEC’s actions against Ripple if XRPL was indeed a “zombie chain” with no usage. He pointed out that more than 80 institutions signed with Ripple to utilize XRPL despite the ongoing lawsuit.
Emir Yavuz, from Ultra Stellar, defended Stellar and expressed disappointment in Forbes’ lack of research and engagement with the community. He highlighted Stellar’s recent achievements in tokenization, including WisdomTree’s $365 million tokenized assets on the network.
While some in the crypto industry agreed with the article’s content, others, like Laura Shin, an independent journalist, praised it as an “excellent story.”
Forbes criticized Ripple for its claims of transforming global money transfers without any significant initiatives. The article also mentioned the loss of market share to stablecoins and questioned Ripple’s treasury holdings of over $20 billion in XRP tokens.
The article highlighted metrics such as market cap-to-fees ratio and fundraising practices as areas of concern. It pointed out that XRP earned only $583,000 in fees last year despite its $36 billion market cap, resulting in a high price-to-fee ratio. It also criticized the hoarding of funds by several projects, including Ripple’s $24 billion in XRP holdings.
Matt Hougan, the CIO of Bitwise Asset Management, summed up the situation by comparing it 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 and divided opinions within the crypto industry. While some leaders vehemently defended their projects, others agreed with the concerns raised by Forbes.