There has been a damning report by AlphaQuest. It seems Cardano tops the list on Dead Coins: Dead Coins Report 2024 This is not a good report in my opinion as it gives a negative light on Cardano’s adoption.
Any thoughts on this?
yes, I’d characterise that as the tactics of a dirty fighter and an attempt to manipulate the market for personal or organisational gain.
2 Likes
Might well be correct. Doesn’t really seem malicious and there are a lot of projects with native tokens that are pretty dead on Cardano.
They are a little thin on methodology. The percentage of what they call “dead coins” heavily depends on how serious a coin endeavour has to be to be counted. Having the pipe dream of “somehow” starting a project with a token is quite common, setting up an X account and a basic website is trivial and minting a native token is also quite easy. We have seen a lot of people with beginner questions on token minting coming into this and other forums where you could tell that they have put zero thought into the question of why their token should have any value at all. Naïvety is without borders in crypto.
If all of these are counted, then the failure rate is, of course, enormous. Doesn’t speak against the ecosystem per se. Trying to regulate who is allowed to mint a token so that failures do not shed a bad light would be far worse. Minting has to be permissionless.
On the one hand, we have to educate people that native tokens are not endorsed in any way, shape, or form by the ecosystem as a whole. They might be total bs and even if they are not, a project might rug pull later or just fail without any malice. Confer Ardana where it still is anybody’s guess how malicious the failure was from what point in time. That is what do your own research means.
On the other hand, such a report could be made more expressive by trying to scale with how much was lost by that failure instead of just counting. If a project never really got off the ground, there is not much harm done if it fails.
6 Likes
I agree with @HeptaSean’s points except over the transparent choice of the weaponised term “dead coins” — as opposed to any more specifically useful and less derogatory synonym — which characterises it as clear-cut industrial sabotage.
The methodology isn’t just thin, it’s biased toward the characteristic account-based favourites: all positioned counter to Cardano’s EUTxO model. The first metric on their list is “Low liquidity / Low trading volume” which applies mainly to the AMM trading model & is blindly followed by the crowd who can only understand numerical blockchain “metrics”.
So their front page strikes home with a slur against Cardano derived primarily from this metric… not to mention grouping it with the failed Terra… without mentioning Cardano’s unique position to overcome the classical problems of AMM through truly atomic, composable, and intent-based swaps:
I feel sorry for anyone who gets led by the nose from an “report” like this to assume Cardano is a platform for failed coins. From my point of view I’d conclude the robust facility of native tokens… minting, metadata, language support, and ecosystem tools… is friendlier than Cardano’s competitors & therefore able to spawn shitcoins far more easily. 
And for the main target audience of these “reports” — crypto speculators simply looking to pump their bags up — I’d conclude based on Cardano’s not-yet-played card of fully decentralised swaps that Cardano based trading is uniquely poised to take over in markets where decentralisation criteria are likely to be suddenly and catastrophically applied: 
3 Likes
That is a strange argument given that most relevant DEXes on Cardano up to now are AMM DEXes (although it is correct that that model isn’t a good fit for UTxO and they are therefore mostly inferior to their counterparts on account-based chains).
As you say yourself:
Deducing “dirty fighter” or “clear-cut industrial sabotage” from that is a very long shot.
2 Likes
For those interested in this discrepancy, there is a debate beginning here which illustrates why the AMM model has been generally followed on Cardano even though it should be possible to do things better without it: https://github.com/cardano-foundation/CIPs/pull/780#issuecomment-1992153561
TL;DR (not a big surprise): Because it’s still possible to build a profitable trading platform more quickly that way.
Many crypto readers at this point are conditioned (like political readers) to think it’s “fair” to produce a hit piece on a crypto (or political) entity which is 100% focused on fault-finding and 0% focused on the extenuating circumstances. Anyone seeing ill intent as a “long shot” in such a piece has likely been softened by that conditioning.
3 Likes
The low liquidity, low volume argument still gets me. I particularly like the comment about this metric by @fallen-icarus in his cardano-swaps README.md:
"If Cardano-Swaps reaches mass adoption, won’t TVL on Cardano go down?
Yes. Yes it will. TVL is a silly metric. It is a measure of who can be most inefficient with DeFi capital."
I would highly recommend reading up about cardano-swaps to understand how this utilises the eUTxO model better than AMM style DEXs. Note also that @fallen-icarus can’t profit from shilling a token, because cardano-swaps doesn’t need a liquidity or governance token by design.
I am also interested to see how this validation zones CIP pans out. It looks like this will open up other ways to leverage the eUTxO model.
The design methods used on Cardano’s eUTxO model need to be different and are still being explored and improved upon. But it is already very clear that the eUTxO model has many advantages over the account model.
4 Likes
I don’t mind Cardano hit pieces anymore.
It used to bother me but by now I realize there is nowhere else to go.
The dollar is undergoing a controlled demolition designed to drive the masses into CDBC adoption.
Bitcoin is under a double spend attack by BlackRock and the central banks via the ETF.
More accurately, the ETF turns Bitcoin into receipt money which always becomes fiat.
That’s why I call it a double spend attack.
It is only a matter of time before the Bitcoin ETF holders realize there isn’t enough Bitcoin to back up their ETF paper. This will start a panic and BlackRock will “come to the rescue” and fork the Bitcoin chain to something the central banks can control directly. ETF paper holders will have no choice but to go along with this.
Ethereum is already under the control of JP Morgan.
So the only chain left standing which is highly decentralized and can not be taken down by the central banks is Cardano.
Central bankers will need a safe store of value to hold all the money they are stealing during this controlled demolition of global markets and redistribution of wealth.
I suspect they will be storing their wealth in ADA - the one that nobody can demolish.
These hit pieces drive the price of ADA down which means the perpetrators can buy more.
So in my opinion Cardano is being honored with each and everyone of these hit pieces.
Others see this too which actually strengthens our community.
4 Likes
I agree. It is best to look at the positives. This is how I think about the price suppression of Cardano relative to Solana, Ethereum, Ton, Doge, etc: I think it is great because it lowers the tax burden on my staking rewards. Awesome, keep the price suppressed so I can afford to keep accumulating Ada staking rewards without paying too much tax.
Also, I feel a tad bit sorry for the Ethereum crowd who don’t yet understand that every time they convert their Eth to a “liquid” staked Eth derivative that they are undertaking a taxable capital gains event. The tax office will track these people down eventually and they will need to calculate and pay capital gains tax for every time they swapped their Eth to “liquid staked Eth” and vice versa.
Who would have thought: Ethereum’s poor staking design does have some real economic consequences. Good luck with the Solana, and other similar “liquid staking” derivative designs.
Unfortunately, articles like this: Solana Liquid Staking: Journey to the center of your SOL make everything sound simple and great. But the word “tax” does not even occur once in that article. Sad really. With the recent price appreciation, some people are generating enormous tax bills, just by staking, which they are completely unaware about. Unfortunately for them being unaware is not an excuse that the tax office will accept.
5 Likes