Someone posted one of those ecosystem graphics that everyone loves to share for their favorite cryptocurrency.
It was for the Cardano ecosystem and it was from five years ago. Most of the projects on the chart were crossed out.
The tweet made a specific point about Cardano’s viability based on this chart:
“what happens if ecosystem collapses?
look at eco map of cardano / ada
most projects are gone now...”
Others commented that it’s misleading because it leaves out current projects that are building.
But I think the post highlights another phenomenon in crypto building: That many crypto companies don’t last too long.
I’d contend, considering the number of Algorand projects I have covered that have fallen over the years, that a similar road map 4-5 years ago would look very similar. Yieldly, the first DeFI platform built on Algorand, has long since disappeared. It’s been relegated to a punchline.
There were rugs like Anirand, gaming projects that never got off the ground (Aegir Tactics), platform mergers, etc.
It’s one reason I am not terribly interested in these maps. They often include projects yet to launch, projects people haven’t heard of and have minimal impact, etc.
More important, and something I plan to write about more extensively in a future edition, is revenue. The correlation is high enough that show me a chain’s revenue and I can probably predict its price potential.
(But there is never a guarantee of course. Some like Polygon are bucking what otherwise is a pretty strong correlation.)
Why does this matter? Creative destruction is happening at speed in the cryptocurrency world. Not just with coins, but with the projects built on those protocols.
Thinking of buying a coin for a platform? Treat it as high risk. Because it is.
I found this out the hard way when I ran my Algorand DeFI experiment. One of the experiments came to a fast end when AlgoStake closed. My $100 experiment had turned into $129 — then quickly dropped to about $16 when the platform collapsed.
Invest wisely.