Is Neo A Zombie Chain?

Here Is What Happened In Neo The Past Week

• 401 new wallet addresses were added - 📉 down 12% week over week

• 2,900 average daily transactions - 📉 down 35% week over week

• 565 average daily active addresses - 📉 down 13% week over week

I heard the term “zombie chain” for the first time earlier this year at ETH Denver. At a panel titled “Sell My Company or Buy Other? Navigating M&A and the Wave to Come”, Nic Carter of Caste Island Ventures used the term.

At the time, he said, “Token issuing dynamics create a zombification of companies that would otherwise sell themselves, but in crypto don’t because they have a longer runway from token raises”. He was referring to the fact that many crypto companies are meandering along, not really generating profit or growth, but unlike companies in other spaces that would have to seek a sale or merger in order to survive, are able to keep “alive” because of token raises. They are the walking dead.

This got me thinking about what projects and chains out there are, in fact, zombies.

Is Neo a zombie chain?

Surely not. Not with a new NEO X coming, exciting DePIN use cases, recent pumps, and the bullish case for NEO. Neo has a growing community that has been more and more active recently.

The question popped into my head again this past week when Forbes made headlines after classifying 20 blockchains as zombies based on those chains having market caps above $1B “despite the fact that they are unproven and have little utility other than for speculative crypto trading.”

When I saw the headline, I reacted in likely the same way that all NEO holders did: click on the article and pray that Neo is not on the list.

To my relief, it wasn’t. However, a lot of other large well-known chains were. Forbes specifically named: XRP, Cardano, Bitcoin Cash, Litecoin, Internet Computer, Ethereum Classic, Stellar, Stacks, Kaspa, Fantom, Monero, Arweave, Algorand, Flow, MultiversX, Bitcoin SV, Mina, Tezos, Theta, and EOS.

So what do those chains have in common that make them “zombies.” The networks named have minimal developer activity, few active wallet addresses, little transaction demand, or a combination of all three of these, and also maintain massive valuations.

Looking at those common factors objectively, Neo should be on that list. My guess as to why it is not is because the network data for Neo is not easily obtained. The Forbes reporter likely did not know where to look for Neo network activity or did not find reliable network activity to compare Neo to the chains on the list.

The name that caught my eye the most was EOS. In mid-March, I wrote about stablecoins and Neo. I used the example of EOS when making a case for why Neo needs to adopt a stablecoin. In that article I mentioned that in Q4 2023 the EOS daily active addresses were 27,000.

In the month of April, N3 has not had more than 1,600 active addresses on the network in a single day.

Additionally, if you are to evaluate Neo on a transaction demand basis, the average daily transaction is low.

Using the criteria applied by the Forbes article, Neo has few active wallet addresses and low transaction demand, and the blockchain has a market cap above one billion dollars.

So Neo is a zombie blockchain. Almost.

Alive and Kicking

Neo is not a zombie despite these poor metrics. The reality is the chain is suffering from a combination of factors that I, and many others before me, have mentioned: marketing, stablecoin uses, etc.

Neo’s saving grace is the developer activity. With the recent news made at conferences from Neo providing Neo X updates, Item Systems NFIs, and community-driven projects within Neo, you cannot say there is little significant development happening.

This may be a big reason why Neo did not make that list, if it was even considered by Forbes. However, objectively, Neo is OLI (outside looking in) on that list.

The fate of Neo will be whether the bullish case becomes a reality. Will Neo X deliver the network activity and developers necessary to change it from a nearly walking-dead chain to a thriving top chain?

I think so but only time will tell. So in the spirit of all “constructive commentary” in this space: Wen NEO X?

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