Structural collapse beneath the surface of prosperity
The cryptocurrency market in 2025 presents an absurd picture: on one side is a record-breaking wave of token issuance, and on the other is an unprecedented project death rate. According to shocking data recently released by CoinGecko, more than 11,600,000 token projects declared failure in 2025 alone, accounting for 53.2% of the total number of projects recorded on the GeckoTerminal platform — meaning that more than half of cryptocurrencies have either gone to zero or fallen into silence.
Even more striking is that from 428,000 projects in 2021 to 20,200,000 by the end of 2025, the market has expanded 47 times in four years, but the survival rate of projects during the same period has plummeted dramatically. In the fourth quarter of 2024, within just three months after the 'October Crash,' 7,700,000 tokens disappeared, accounting for 66% of the year's dead projects.
In this brutal elimination match, a more insidious **"zombie project"** is spreading. They have top capital backing, support from leading exchanges, and frequently updated social media dynamics, but are long-term stagnant in actual product delivery, technical iteration, and ecosystem development. In 2026, identifying these "walking dead" has become a necessary survival lesson for investors.
Sleepless AI: A technological vacuum wrapped in AI narrative
Current Price: $0.0248 | All-Time High: $2.37 | Decline: -98.95%
As a star project of Binance Labs’ sixth incubation program, Sleepless AI once made a stunning appearance with the glamorous concept of "Web3+AI virtual companions" in Binance Launchpool’s 42nd phase. However, entering 2026, its token price has plummeted from an all-time high of $2.46 to around $0.024, with a market value evaporating by nearly 99%, and technical indicators show an extreme bearish pattern with 12 sell signals against 2 buy signals.
Crisis of technological transparency
Despite the project party continuously emphasizing the technological integration of AIGC and large language models (LLM), there are almost no public channels to trace any core code updates or algorithm iteration records. The Web Dapp originally scheduled for release in Q2 2025 remains a mystery, and the GitHub repository has long been in a low-frequency update state. This "black box" R&D model stands in stark contrast to the open-source culture of leading projects in the current AI track.
Complete failure of mobile strategy
In the mobile-first era, the product landing process of Sleepless AI can be described as a disaster. Its flagship product (HIM) had not been listed on the iOS App Store or Google Play by the beginning of 2026, and its official website only offered Android APK downloads. This channel deficiency directly obstructed large-scale user acquisition paths and exposed the team’s critical shortcomings in product engineering capabilities.
Suspicion of narrative restructuring
Market skepticism is rising: the project has been accused of being a "narrative restructuring" of old Web2 games—packaging AI concepts and leveraging capital relationships to forcefully affiliate with the AI track’s popularity, in exchange for investments from Binance Labs and Launchpool traffic dividends. Coupled with its weak technical delivery and the catastrophic drop in token price, this **"narrative parasitism"** phenomenon has become a key indicator for identifying zombie projects.
Hooked Protocol: The ecological desert after incentives dry up
Current Price: $0.038 | All-Time High: $3.09 | Decline: -98.8%
With the Learn-to-Earn model and a luxurious investment lineup from Sequoia China and Binance Labs, Hooked Protocol once shone as the 29th Launchpad project of Binance. However, after the HOOK token plummeted nearly 99% from its peak, the project is facing the ultimate test of "real user retention" and "ecosystem gold content."
The inevitable outcome of subsidy dependence
The initial success of Hooked heavily relied on the traffic effects of Binance Launchpad and the token subsidy mechanism. This model can yield a large user base in the short term, but when incentives disappear and token prices crash, the "bubble user volume" that lacks rigid demand rapidly shrinks. Historical experience repeatedly proves: the ecological activity after TGE (token generation event) is the touchstone for testing project vitality.
"Shellization" of transformation marketing
In 2025, Hooked announced a high-profile transformation to an "AI-driven learning ecosystem," claiming to collaborate with 3-7 top universities to develop courses and launch Hooked Coursera Hub. However, a closer examination of its cooperation substance reveals that most are brand-level endorsements, lacking breakthrough progress at the technical level. This "announcement-style transformation" essentially covers the failures of the old business with new narratives rather than genuine technological evolution.
The current HOOK token Fear & Greed Index shows 23 (extreme fear), with all 21 technical indicators signaling bearishness, and market confidence is on the verge of collapse.
Saga: The shovel seller cannot find the mine
Current Price: $0.032 | All-Time High: $6.00 | Decline: -99.5%
With the grand vision of "one-click chain issuance," Saga attracted over $10 million in funding from top institutions like Placeholder, GSR, and Samsung Next and launched in Binance Launchpool’s 51st phase. However, this powerful automated chain issuance tool seems at a loss in the face of real market demands.
Narrative drift exposes ecological anxiety
Saga has demonstrated a high degree of "narrative flexibility": from initially focusing on 350+ cooperative projects for a game-exclusive chain, to later shifting to AI infrastructure, and then betting on modular blockchain—this frequent change essentially reflects the anxiety of growth in the old ecosystem lacking practical applications. If its core technology "Chainlet" truly has market demand, it should be able to drive token buybacks through continuous developer rentals, but the reality is a lengthy cooperation list lacking blockbuster support.
The fatal collapse of security credibility
In January 2025, SagaEVM encountered a $7 million vulnerability attack, causing the stablecoin $D to unpeg to $0.75, and TVL evaporated from $37 million to $12 million. For a project focusing on infrastructure positioning, this security incident is a devastating blow. When grand narratives fail to translate into ecosystem data, and technical security shows flaws, the market's punishment is often merciless.
Dymension: A data ghost town under modular narratives
Current Price: $0.043 | All-Time High: $6.00 | Decline: -99.3%
Dymension's script is highly similar to Saga. The RollApp concept it proposed is quite avant-garde in theoretical structure, but in the face of the actual data in 2026, it resembles a grand ghost town.
The false prosperity of the RollApp network
Dymension has claimed that over 10,000 RollApps have been deployed within its ecosystem, but this data boom stems from the lowered "threshold for issuing tokens and chains." The vast majority of RollApps, apart from the initial token issuance, have no ongoing on-chain transactions or substantial outputs, and most have vanished without a trace. This "quantity bubble" sharply contrasts with the quality density of mature ecosystems like Ethereum.
Economic dysfunction of infrastructure
Currently, Dymension's overall TVL is only $1.3 million, with major DEX projects and ecosystem applications performing poorly. This starkly contrasts with the initial market expectations of its "modular leader." When the applications running on the infrastructure are mostly zombie applications, and the overall ecosystem performance is dismal, the price correction of the native token DYM becomes inevitable—currently, the FDV is only $45 million, and the token price has dropped 99% from its peak of $6.
The structural root cause of the zombie plague
The reason these projects can maintain a superficial "vitality" lies in the deep structural ailments of the Web3 industry:
1. Power rent-seeking in token capitalization
Many projects’ paths to listing do not stem from technological breakthroughs but are heavily reliant on **"capital mixing + narrative packaging + wash trading data"** as a trinity operation. Driven by the collaboration of VCs and internal executives, projects enter top exchanges through exquisite white papers and testnet wash trading. Once the token unlocks, the team often immediately loses development motivation, entering a state of "maintenance operation."
2. The "black box" operation of team backgrounds
Common characteristics of zombie projects: The backgrounds of core operators and technical leaders are extremely vague. This black-boxing not only reduces the accountability costs when technical bottlenecks or security vulnerabilities arise but also provides a very low exit threshold—teams can quickly change shells after the project stagnates, re-layout in new narratives, and repeatedly consume market credit.
3. Survival strategies of narrative parasitism
These projects have a strong "hotspot parasitism" ability. Whenever the market trend changes (AI, DePIN, RWA, etc.), they align their narratives through "announcement-style transformations." This not only increases the cost of identification for investors but also leads to scarce liquidity being dispersed in hollow shells lacking outputs, creating a systemic resource mismatch.
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2026 Survival Guide: The Triple Filter for Penetrating Narrative Fog
Facing a chaotic market intertwined with 20 million token issuance projects, investors must establish a new cognitive framework:
Filter One: Verifiable Technical Delivery
• Team transparency: Refuse anonymous or vaguely backgrounded core members
• Code activity: GitHub submission records, real interactions in developer communities
• Roadmap fulfillment rate: Beware of projects that delay key milestones for a long time
• Product distribution capability: Listing on mainstream app stores, actual user acquisition data
Filter Two: Analysis of Data Gold Content
• Distinguish between "subsidy-based activity" and "native demand": Observe user retention rates after token incentive reductions
• Authenticity of on-chain data: Identify wash trading and bot addresses
• TVL Quality: Focus on fund retention duration and real application scenarios
Filter Three: Consistency Check of Narratives
• Beware of "quarterly transformations": True innovation requires deep cultivation, frequent changes usually mask the failures of old businesses
• Validate cooperation substance: Distinguish between brand collaborations and technical integrations
• Assessing capital structure: Unlocking timetable, team holding ratio, market maker behavior patterns
Conclusion: Seeking real value in the ruins
The data of 2025 has already sounded the alarm: the death of 11.6 million projects is not a natural process of market clearing, but a collective backlash of capital abuse and narrative bubbles. When issuing tokens becomes as easy as registering an email, and when the Launchpool of top exchanges becomes a "legalization channel" for zombie projects, the foundational value of the industry is being shaken.
In 2026, what the crypto market needs is not more narrative innovation but a return to delivery capabilities. Investors must realize that filtering out teams that truly deliver and solve real problems among 20 million projects requires not only technical analysis skills but also a clear understanding of the structural defects in the industry.
Remember: In a world overrun by zombies, staying awake is the biggest moat.
If you find this in-depth analysis helpful, feel free to like, comment, and share! What other suspected zombie projects are you following? Please share your observations and insights in the comments, and let’s penetrate the fog together to find real value! #CZ币安广场AMA #比特币挖矿难度下降 #Bitcoin谷歌搜索量暴升 #何时抄底？ #altcoins $BTC
