Cardano Struggles as it becomes home to the most failed crypto projects

Cardano has long been a widely promoted Blockchain having first forked from Ethereum as a former developer from Ethereum split ways with the initial team.

Despite the high profile move Cardano’s native token ADA has failed to gain any large traction in this space and new information has come to light that showcases worrying signs for the project as it continues to produce some of the most failed Crypto Currency projects in the sector.

However, Cardano still has managed to emerged as a prominent blockchain platform promising advanced features and robust infrastructure. With recent reports shedding light on a concerning trend, despite its best efforts, Cardano hosts a significant portion of failed projects posing significant barriers for the blockchain's progress.

The Boom and Bust of Digital Assets

Since its inception, the crypto currency market has witnessed a staggering number of projects failing to sustain themselves. Over 24,000 crypto currencies have been listed since 2014 with a staggering 65% classified as 'dead' or failed. This alarming failure rate brings to light the volatile and speculative nature of the industry, where many projects struggle to establish long-term viability.

The period spanning 2020-2021 characterized by a bullish trend in the crypto currency market, saw a surge in project failures. During this time, 7,530 crypto currencies failed to survive, representing over half of all deadcoins. Cardano, along with the Terra ecosystem stood out with the highest rates of project failures raising questions about the challenges faced within these ecosystems.

To classify projects as deadcoins, researchers used various criteria such as low trading volume, inactive social media accounts and defunct websites. Despite Cardano's efforts to foster innovation and sustainability within its ecosystem, it has grappled with a significant number of failed projects contributing to the overarching issue of project failures in the crypto currency space.

The high failure rates observed in recent years highlight the complexities and risks associated with crypto currency investments. The simplified process of creating tokens, coupled with the proliferation of meme coins has led to a surge in projects without solid foundations, many of which are quickly abandoned. This phenomenon has been particularly pronounced during bullish aka Bull Market market trends, where speculative fervor often overshadows fundamental value.

2021 Had The Most Failures

The year 2021 emerged as the bleakest period for crypto launches, with over 70% of crypto currencies introduced during this time becoming deadcoins. This trend continued into 2023, albeit with a slight improvement, as approximately 60% of projects launched during this year failed to sustain themselves. However, the subsequent year witnessed a notable decline in the failure rate suggesting a potential improvement in the quality and sustainability of newly launched projects.

A deeper analysis of the reasons behind crypto currency failures reveals various factors contributing to project deactivation. These range from lack of trading activity to instances of scams or 'rug pulls,' where projects deceive investors and abruptly exit the market. Additionally, internal factors such as team disbandment, rebranding efforts or significant token modifications can lead to project obsolescence and subsequent removal from crypto currency platforms.

Despite facing significant hurdles, Cardano continues to strive for innovation and sustainability within its ecosystem. However, the prevalence of failed projects poses substantial barriers to the blockchain's growth and adoption. Addressing these challenges requires concerted efforts from project teams, regulators and industry stakeholders to enhance due diligence, promote transparency and foster a culture of accountability within the crypto currency space.

Still Hope For ADA

While Cardano represents a promising blockchain platform with advanced features and capabilities, its journey is marked by the pervasive issue of project failures. By acknowledging these challenges and implementing proactive measures, Cardano can navigate towards a more resilient and sustainable future, ensuring its continued relevance in the rapidly evolving crypto currency landscape.

It also raises a number of other issues in relation to the development of crypto currency projects and their ease to establish tokens at a whim and if there needs to be a more sustainable model developed that supports innovation and agile market development. Without impacting the broader ecosystem as the more projects that launch and fail is large sums of funds lost impacting the broader digital asset economy.

In future, no doubt things will get a lot better as people move to a more pragmatic and economically sustainable future, but how much of it will be supported within the current system. It leaves much to the unknown but no doubt the sector will as it has in the past, resolve many of these issues in it’s own time.

In the meantime, make sure to do your own research.

Image sources provided supplemented by Canva Pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.

Posted Using InLeo Alpha