Death By Abandonment’ Is Reason Most Crypto Projects Die Before Their 2nd Birthday: Longhash
In efforts to understand the major causes leading to the demise of many crypto projects, blockchain education platform Longhash dug into Coinopsy’s data to come up with conclusions on what kills crypto projects.
The analysts examined 700 crowd sourced projects in a span of 8 years and came up with a conclusion that majority of crypto projects had died due to abandonment which accounted for 63.1% of the dead crypto projects.
According to an article released by Longhash, crypto projects dying as a result of abandonment were mostly due to the investors halting trading an asset which led to volumes dropping to zero. These projects, on average, had a lifespan of about 1.6 years.
The research also identified that scams accounted for about 29.9% of the dead crypto projects making it the second most prevalent cause. The researchers found that 2017 recorded the highest number of scams in the crypto industry. The number of projects dying due to scam increased five-fold as per the researchers as indicated below.
The report by Longhash also identified three people who were severely implicated in three distinct dead scam projects mentioning Bitcointalk user Crunck as well as another person going by the name Daniel Mendoza.
The other category of dead crypto projects identified by Longhash was joke projects like AnalCoin, BieberCoin as well as BagCoin. This category accounted for 3.2% of dead crypto projects and had an average lifespan of about 1.4 years.
Longhash’s report indicates that its difficult to quantify the exact number of dead crypto project since most of the data is crowdsourced. The report also notes that there is little consensus on what constitutes a dead crypto project.
Cointopsy has listed 705 projects as dead, DeadCoins has listed 1779 as dead while CoinMarketCap has more than 1000 projects that record less than $1000 every day in terms of trading volume as near their death or lifeless.
Cointelegraph reports that in its recent research, it was found that the most common causes of crypto projects deaths were low liquidity, fraud, lack of utility as well as poor management.