Most protocols based on Ethereum and Solana fail to generate revenue, highlighting a problem of hidden unemployment within these networks’ ecosystems, according to CoinDesk, citing DeFi Llama.
Hidden unemployment refers to a situation where some workers are formally employed but do not contribute to economic output.
A similar phenomenon is observed in the blockchain sphere: many decentralized protocols exist, yet their utility remains questionable. The situation resembles “ghost towns,” but in a digital format.
The Ethereum network, the largest platform for smart contracts, has 1271 active protocols. According to DeFi Llama, 88% of them have not generated revenue in the past 30 days. In the Solana ecosystem, where 264 protocols operate, the share of non-revenue-generating projects is 75%.
CoinDesk highlighted several consequences of hidden unemployment in the blockchain sphere:
- Infrastructure load — every smart contract, even inactive, remains permanently in the distributed ledger, increasing storage and bandwidth requirements;
- Security risks — abandoned contracts become targets for hackers, and a vulnerability in one such protocol could threaten the entire ecosystem;
- Economic inefficiency — millions of dollars in investments and thousands of developer hours are now “frozen” in unproductive assets;
- Deterioration of user experience — newcomers find it difficult to navigate among numerous non-functioning projects, undermining trust in DeFi as a whole.
In May, analysts at CoinGecko noted that since 2021, out of nearly 7 million tracked crypto assets, 3.7 million — over 50% — have ceased trading.