Crypto Industry Needs More dApps, Not New Chains

Changpeng “CZ” Zhao, the former CEO of Binance, has emphasized the need for crypto industry builders to focus on developing decentralized applications (dApps) rather than creating new blockchain networks.

CZ made this comment in response to a statistic shared by a Messari researcher, which highlighted the struggles of new blockchains after their respective Token Generation Events. According to the data, several new blockchains have experienced significant declines in their token values.

Decline in New Blockchain Token Values

Some of the notable declines include:

  • Starknet’s token cumulative return has decreased by 87%
  • Dymension’s token value has declined by 87%
  • Blast’s token value has decreased by 85%
  • Mode’s token value has declined by 70%
  • Berachain’s token value has decreased by 59%
  • Scroll’s token value has declined by 50%

However, Hyperliquid’s token value has experienced a substantial increase of 1,100% since its TGE.

Need more dapps instead of chains.

CZ’s comment comes as the crypto market has seen around $10 billion in long position liquidations, and by the end of April, $17 billion worth of token unlocks have entered the market. This indicates that the market has become saturated with the emergence of more and more Layer 1 blockchains and Layer 2 solutions.

Market Saturation

As one researcher noted, “The market can no longer absorb execution environments that add no value.”

Many users agree with CZ, stating that there are too many chains on the market and that more decentralization is needed to help the crypto industry grow.

Example of Market Saturation

For example, Berachain recently carried out one of the largest airdrops this year alongside the release of its highly anticipated mainnet. However, the token’s value plummeted as insiders began dumping the token, dragging the price down by at least 63% from its previous high.

As the crypto industry continues to evolve, it’s essential to focus on developing decentralized applications that add value to the market. By doing so, the industry can grow and mature, providing more opportunities for users and investors.

Stay up-to-date with the latest news and trends in the crypto industry on Global Crypto News.

Post Views: 0