- Early wealth accumulation by founders often leads to the collapse of crypto projects.
- Founder-controlled tokens with poor decentralization contribute to unsustainable crypto growth.
- 72% of crypto projects failed since 2020, highlighting major flaws in tokenomics and project sustainability.
Angel investor Naval Ravikant recently shared insights on the high mortality rate of cryptocurrency projects. He stated that most projects fail because their founders accumulate wealth too early.
Industry Experts Weigh in
Aaron Jacobson, a marketing leader at the X social media platform, echoed Ravikant’s sentiment. He emphasized that many projects issue their own tokens with questionable decentralization. Instead of building on established cryptocurrencies like Bitcoin, they attempt to fund themselves with founder-controlled tokens. He explained that such structures lead to unsustainable growth and eventual collapse.
Mike van Rossum, a trader, highlighted the strategic design behind some tokenomics. He noted that many token structures are built to benefit venture capitalists during token generation events. This approach prioritizes early financial gains over long-term viability.
Venture capitalist Adam Draper pointed out that the cryptocurrency industry historically focused on capturing value before creating it. This mindset often results in wealth generation before a project’s completion. Draper added that the trend appears to be shifting now, with more projects aiming for sustainable value creation.
Crypto Market Shifts and Rising Statistics
A report by Alphaquest and Storible highlighted the grim statistics. Since 2020, approximately 72% of crypto projects have failed. Out of over 12,000 projects analyzed, 8,854 were found to be defunct. The year 2023 marked a particularly difficult period, accounting for 59.35% of these failures.
Data from Coinopsy shows that dead cryptocurrencies have increased by 35% compared to last year. The total number of dead coins reached 1,949 this year, up from over 1,440 in February 2023. These dead coins were often scams, projects with halted development, or had minimal trading activity. Many lacked liquidity or faced technical issues such as downed websites and inactive nodes.
The surge in failed projects dates back to 2017, driven by a wave of initial coin offerings (ICOs). ICOs were intended to launch new blockchain-based cryptocurrencies or services. The rise in the number of dead coins raises concerns on the regulation and impacts they might have on the broader crypto market.
The post Angel Investor Naval Ravikant Highlights Why Most Crypto Projects Collapse appeared first on Crypto News Land.
Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0
PRC Comment Policy
Your comments MUST BE constructive with vivid and clear suggestion relating to the post.
Your comments MUST NOT be less than 5 words.
Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.
Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.
Constructive REPLY to comments is allowed