Report: 99% of Web3 Projects Generate No Revenue — ‘Zombie’ Token Economy
A Tiger Research report finds roughly 99% of Web3 projects generated effectively zero revenue in the most recent 30-day window, with only about 200 projects earning at least $0.10. The study combines Token Terminal and on-chain analytics to conclude many projects operate as ‘zombies’—technically active but reliant on token treasury liquidation and continuous fundraising rather than real revenue. Key structural flaws identified are token-first economics, misaligned founder incentives from token allocations, and speculative funding driven by narrative over fundamentals. Typical non-revenue expense drains include team pay, exchange listings, marketing, and audits; projects often sell treasury tokens to cover costs, creating a “slow-motion liquidation” that benefits early insiders and risks later investors. Tiger Research recommends clearer revenue pathways before token issuance, conservative valuations, user-adoption metrics, and sustainable tokenomics. The report cites protocol fees, subscription (SaaS-like) models, enterprise B2B use cases, and hybrid fiat-token models as viable revenue approaches. Implications for traders: increased scrutiny on token fundamentals, potential selective capital flight from low-quality tokens, regulatory attention, and a possible market rotation toward projects with demonstrable revenue and aligned tokenomics.
Bearish
The report exposes industry-wide revenue weakness and reliance on token treasury liquidation, increasing downside risk for many tokens. Short-term, expect selling pressure on low-liquidity, low-revenue tokens as traders reprice projects lacking fundamentals—this can widen volatility and reduce market depth for small-cap tokens. Medium-term, capital may rotate toward projects with demonstrable revenue (protocol fees, subscriptions, enterprise deals) and transparent tokenomics, benefiting higher-quality layer-1s, protocols with on-chain revenue, and reserve-backed tokens. Regulatory scrutiny and investor aversion to speculative funding will likely amplify deleveraging of marginal projects. Historical parallels include post-dot-com re-rating and crypto cycles where narratives gave way to fundamentals (e.g., 2018–2019 bear market clearing low-quality ICOs). Overall, the news heightens downside risk for speculative tokens and favors selective accumulation in revenue-generating projects and blue-chip cryptos.