More than 12,000 crypto coins become zombies in market slump: Report

business-standard.com:

When it comes to putting a number on this year’s crypto swoon, the one cited most often is $2 trillion, the amount of digital-asset market value that evaporated in the downdraft. But here’s a figure that captures the breadth of the bear market: 12,100.

That’s the number of crypto tokens that have effectively ceased trading this year, according to data provider Nomics — not dead technically, but like zombies, not quite alive either.

Most blockchain projects are built around bespoke digital coins, which often function as user rewards and compensate developers for their woring them inck, giventive to stay involved. During last year’s price run-up, thousands of crypto startups issued new tokens to support these projects, and bullish sentiment meant there was ample demand for the market to absorb the vast majority of them and still drive prices higher.

That all changed this year, as macroeconomic conditions put investors off risk assets and token prices nosedived. The implosion of the Terra blockchain, as well as the collapse of hedge fund Three Arrows Capital and crypto firms like Celsius Network caused a further selloff and cooled venture capital funding. The biggest tokens, like Bitcoin and Ether, suffered major declines before eventually finding support. But for many coins backing fledgling, riskier and sometimes sketchier endeavors, the downturn has delivered the equivalent of a knockout blow.

Nomics compiled an analysis of coin activity for Bloomberg and discovered that more than 12,100 tokens have become “zombies” this year, defined as tokens that have not traded for a month. That’s more than twice as many as in all prior years combined, the researcher found.

“During the bull market of 2021, there was plenty of