Shocking Data: Just 12% of Ethereum & 25% of Solana Protocols Generate Real Revenue – Is Blockchain Overhyped?

Blockchain's dirty little secret? Most protocols are running on hopium.

Revenue reality check hits Ethereum and Solana

The numbers don't lie—while VC money floods in, only a fraction of these 'world-changing' protocols actually make money. Ethereum's 12% revenue-generating rate looks especially grim next to Solana's slightly-less-terrible 25%. But hey, at least the token prices keep pumping—because fundamentals are so 2021, right?

When will the music stop?

With yield farmers playing hot potato and 'builders' collecting grants for vaporware, this looks less like Web3 innovation and more like a subsidized jobs program for crypto bros. The real utility? Keeping Lambo dealerships in business.

Key AI insights

Inactive projects are not necessarily a direct burden on the network's processing power in the same way that a congested network is, but they do pose an indirect burden in the following ways:

Every smart contract, active or not, is stored on the blockchain forever. This Immutable data adds to the size of the blockchain, and all nodes in the network must store and maintain this history. As the total number of contracts grows, so do the storage and bandwidth requirements for running a node. While the effect of a single inactive contract is minimal, a "ghost town" of thousands of them adds up over time, increasing the network's long-term operational costs.

The existence of a vast number of inactive or abandoned contracts creates a larger attack surface. A smart contract, even if it's no longer used, can contain a vulnerability that, if exploited, could have unforeseen consequences for other parts of the ecosystem or funds locked within it. This introduces a LAYER of systemic risk to the network that must be continually monitored by security researchers and auditors.

This is where the "disguised unemployment" analogy is most apt. While these projects aren't causing congestion, they represent a collective failure of capital and developer time to create a productive asset on the network. The funds, time, and effort spent to deploy these projects are effectively locked in a non-productive state, which is a drag on the overall efficiency of the ecosystem.

Just as a physical ghost city represents a massive investment of capital and labour that yields no economic return, the multitude of non-revenue-generating protocols on blockchains represents wasted developer effort and capital that does not contribute to the network's productivity.

A large number of inactive projects can make it difficult for new users to find and trust legitimate, active protocols. Sifting through a sea of defunct or failed projects can be confusing and might detract from the overall user experience.