Hidden unemployment in Blockchain? Only 12% of Ethereum and 25% of Solana protocols have income in the last 30 days.

The Idle Protocol Phenomenon of Ethereum and Solana "Hidden unemployment" refers to a labor force that appears to be employed on the surface but is not making any substantial contribution to the economy. A similar phenomenon can be found on top smart contracts blockchains, especially on platforms like Ethereum and Solana, where a large number of decentralized protocols have failed to generate any revenue. This article analyzes how these "ghost digital city" idle protocols on these blockchains increase the network's storage burden, bring security risks, and drop overall economic efficiency.

According to data from DeFiLlama, Ethereum is the world's largest smart contracts Blockchain, hosting 1271 protocols. However, shockingly, in the past 30 days, 88% of the protocols (i.e., 1121 projects) generated no revenue. Similarly, Ethereum's competitor Solana, although with a smaller ecosystem and hosting 264 protocols, saw that 75% of its protocols also did not generate any revenue in the past few days.

This means that although Ethereum and Solana host a large number of protocols, only a few have captured any economic value in the recent past, similar to that part of the workforce that receives salaries but does not contribute output, or those ghost cities that cannot generate economic returns.

Potential Issues of Smart Contracts on Blockchain

1. Storage Burden Every smart contract, whether active or not, is permanently stored on the blockchain. This immutable data increases the size of the blockchain, and all network nodes must store and maintain these historical records. As the number of contracts increases, the storage and bandwidth required for running nodes also continue to rise. While the impact of a single inactive contract is negligible, thousands of "ghost protocols" will increase the long-term operational costs of the network over time.
2. Security and Vulnerability Risks A large number of inactive or abandoned contracts create a larger attack surface. Even if a smart contract is no longer in use, it may still contain vulnerabilities that, if exploited, could have unforeseen consequences for other parts of the ecosystem or locked funds. This poses systemic risks to the network, and security researchers and auditors must continuously monitor these risks.
3. Economic Inefficiency This is precisely where the analogy of "hidden unemployment" is most fitting. Although these projects do not directly cause network congestion, they represent a collective waste of capital and developer time, which has not generated productive assets on the network. The funds, time, and effort used to deploy these projects are effectively locked in a non-productive state, slowing down the efficiency of the entire ecosystem.
4. Barriers to User Experience A large number of idle projects may make it difficult for new users to find and trust truly active protocols. Browsing through a bunch of failed or abandoned projects can be confusing and may drop the overall user experience.

Conclusion: The existence of numerous non-yielding protocols on the Blockchain not only increases the storage burden of the network and brings security risks, but also leads to low economic efficiency. Similar to "ghost towns," these non-producing smart contracts represent a waste of developers' time and capital, slowing down the overall progress of the blockchain ecosystem.