I don’t really understand the angle they’re going for here. I’d expect that most of these are just abandoned products that failed to become a viable business, and don’t claim to employ anybody. You could get a similar stat if you looked at projects that have used AWS or something like that.
baobun · 4h ago
A lot of them have never intended or claimed to be businesses or revenue-yielding in the first place.
j45 · 4h ago
Especially if a lot of them are ideas being explored and not coming from a business background or use case.
When businesses with their use cases start using something like this, I'd say watch out, but the reality is it might just be invisible and just print the same receipt we're used to.
Animats · 4h ago
Blockchains store data as long as someone, somewhere has a node. There's no way to purge old data. So old, useless data does build up.
It's not that bad, though. The Ethereum chain is about 1.4TB right now.[1] Growth is roughly linear. Bitcoin is under half a terabyte. Those are manageable numbers given current disk sizes.
The size of the Solana blockchain is claimed to be only 10MB. That's tiny. Where is the data stored?
From the article: "Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards." Right. That's Coinbase trolling for clicks.
A large number of apps in any ecosystem have little to no revenue. Coindesk discovers the Pareto principle, breaking news...
alphazard · 5h ago
This is a statistic that no one asked for and no one should care about. How much L2 value is transacted every day on each ledger? is a much better first question. A good second question is how that value is distributed amongst the various L2 protocols.
Is there really a security exposure to protocols you don’t yourself employ? How do protocols get updated? Can they be EOLed? Turns out there’s a lot I don’t know about Ethereum.
baobun · 5h ago
It depends.
Say you're participating in a lending protocol utilizing some form of on-chain price oracles (ie smart contracts exposing updating data), such that gaming of some particular third decentralized exchange would manipulate the pricing data and could thereby affect your position (triggering liquidation or whatnot).
Say you're holding some on-chain stablecoin backed by other tokens. Issues with contracts of those tokens could tank their value and thereby affecting your stablecoin value.
It all comes down to introduction of points of trust in interconnected systems. Tale as old as time.
chrisco255 · 4h ago
As sibling comment mentioned, depends on if you integrate with those protocols whether or not you are exposed to external security issues.
As for upgrades, some protocols are immutable and can't be updated, however, most complex protocols implement some kind of upgrade mechanic.
Smart contracts cannot change their code once deployed, but you can implement a proxy pattern that delegates calls to an implementation contract, and swap out implementation contracts as needed by updating the pointer on the proxy. Some protocols have simple single owner systems for updating the implementation. Some are owned by multisigs and may require a 5 of 9 (or whataver arbitrary majority configuration) committee to sign off on the upgrade. Others require a vote by the token holders of the protocol to approve an upgrade.
If it's an upgradeable protocol then it can be EOLed, otherwise it lives forever onchain.
daft_pink · 5h ago
You’d think that smart contracts would have very high levels of inactivity and once you create a smart contract it’s impractical for it to be depracated.
latchkey · 5h ago
The tone of the article sounds like an attempt to make news out of nothing, while ETH is nearing ATH's.
Years ago, we went through a DeFi summer where a ton of protocols were built. Then, multiple years of nothing as the summer ended.
Since then, many of the protocols condensed into a few very very active protocols. Turtle has $1.1B deployed in only two campaigns. AAVE has $55B. Morpho has $10B. There are tons more protocols doing just fine.
bo1024 · 5h ago
Yeah, this is odd, a bit like calling out the percent of registered web domains that don’t generate revenue.
charcircuit · 5h ago
What percentage of businesses have revenue, including dissolved businesses?
12% and 25% is higher than I would have predicted since I'd suspect most to fail.
wslh · 4h ago
CoinDesk is ignoring the elephant in the room: for most protocol owners, revenue is almost irrelevant. Early investors in crypto startups often get tokens worth many times their cash investment. Once the protocol is live and popular, the money pours in. Vesting rules? A few years is plenty. The real kicker is that there's no transparency about how many tokens these investors get, only the round investment totals make it into public reports.
When businesses with their use cases start using something like this, I'd say watch out, but the reality is it might just be invisible and just print the same receipt we're used to.
It's not that bad, though. The Ethereum chain is about 1.4TB right now.[1] Growth is roughly linear. Bitcoin is under half a terabyte. Those are manageable numbers given current disk sizes.
The size of the Solana blockchain is claimed to be only 10MB. That's tiny. Where is the data stored?
From the article: "Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards." Right. That's Coinbase trolling for clicks.
[1] https://ycharts.com/indicators/ethereum_chain_full_sync_data...
Based on this answer[1] it was 100TB in 2022.
[1] https://solana.stackexchange.com/questions/146/whats-the-cur...
Say you're participating in a lending protocol utilizing some form of on-chain price oracles (ie smart contracts exposing updating data), such that gaming of some particular third decentralized exchange would manipulate the pricing data and could thereby affect your position (triggering liquidation or whatnot).
Say you're holding some on-chain stablecoin backed by other tokens. Issues with contracts of those tokens could tank their value and thereby affecting your stablecoin value.
It all comes down to introduction of points of trust in interconnected systems. Tale as old as time.
As for upgrades, some protocols are immutable and can't be updated, however, most complex protocols implement some kind of upgrade mechanic.
Smart contracts cannot change their code once deployed, but you can implement a proxy pattern that delegates calls to an implementation contract, and swap out implementation contracts as needed by updating the pointer on the proxy. Some protocols have simple single owner systems for updating the implementation. Some are owned by multisigs and may require a 5 of 9 (or whataver arbitrary majority configuration) committee to sign off on the upgrade. Others require a vote by the token holders of the protocol to approve an upgrade.
If it's an upgradeable protocol then it can be EOLed, otherwise it lives forever onchain.
Years ago, we went through a DeFi summer where a ton of protocols were built. Then, multiple years of nothing as the summer ended.
Since then, many of the protocols condensed into a few very very active protocols. Turtle has $1.1B deployed in only two campaigns. AAVE has $55B. Morpho has $10B. There are tons more protocols doing just fine.
12% and 25% is higher than I would have predicted since I'd suspect most to fail.