Crypto’s Top 10 Gainers Show Little Non-Speculative Demand

Of the top 100 coins and tokens by market cap, the 10 biggest gainers of the week are a bit surprising. As of May 11, the list includes four smart contract platforms with difficult to discern adoption and four tokens with equally questionable utility.

Top 10 Gainers on May 11 via CoinGecko

In the lead, up 204% on the week, is Telcoin. The obscure project positions itself as a way to send remittances with mobile phones rather than remittance agents on the ground like Western Union and Moneygram employ. The Telcoin website says the project will issue its Ethereum-based token, TEL, to telecom operators based on their “transaction volume and integration maturity,” but it doesn’t appear many (or any) telecom operators are interested as of yet.

The number two seven-day gainer, Safemoon, has seen its price rise 137% over the week, gaining a market cap of $3B. And it still has no clear utility. The project was built on Binance Smart Chain and pumped by Zoomers on TikTok last month, but its Github remains unchanged since the token was launched on March 4.

And Ethereum Classic, the blockchain that stuck around after The DAO Hack in 2016 and subsequent hard fork that became what is today the Ethereum blockchain, rounds out the top three, gaining 117% at the time of writing.

These gains continue to highlight the speculative nature of cryptocurrency investment and seem to signal that new retail investors are purchasing low value coins and tokens they hope they’re early and will serve up hockey stick returns like others have.

Smart Contracts? Or Silly Investments?

The hottest price action for smart contract platforms this week belongs to Ethereum Classic, EOS, Qtum, and Lisk. While out of the limelight in terms of DeFi applications deploying to these chains, their Github repositories do show some amount of activity. Contrary to what some DeFi enthusiasts might suspect, this may suggest these chains are not “ghost chains,” blockchains without any active development teams.

For instance, EOS’s Github shows 34 different repositories with updates in the past week, and Qtum and Lisk show 13 and 11 repositories with updates in the past week, respectively. Ethereum Classic’s Github lags behind with only two updated repositories in the last week. The three 51% attacks that the project suffered last August are also cause for concern.

The mixed bag of Github activity doesn’t indicate that the projects’ developers have entirely moved on despite the chains’ limited utility in DeFi. But for comparison Ethereum has 26 repositories which developers have updated in the past day alone. Worth noting too, is that a blockchain doesn’t necessarily need users for developers to keep contributing to the project.

Interestingly, CryptoMiso, which tracks crypto project’s Github commits, places Lisk fifth in those terms over the last three months. That’s even ahead of Ethereum, which ranks at number 15. EOS and Qtum slide in at the 41st and 58th, respectively, over the same time period. Ethereum Classic isn’t listed by the data provider.

Exploring Network Activity

If the price of a platform’s native token is moving upward based on fundamentals, it would be expected that the fees paid on the platform would also be increasing because users must pay fees in order to use a blockchain.

According to data provider Coin Metrics, however, the only two of the four smart contract platforms with data available, Lisk and Ethereum Classic aren’t generating much at all. Lisk generated only around $1883 in daily fees on May 11, while Ethereum Classic generated $1347. This contrasts starkly with the $117M in fees Ethereum generated on the same day, an all-time high and more than 58,000 times more than Lisk and ETH Classic.

Designed To Moon

Yearn Finance’s token YFI and Bitcoin Cash were also high performers this week, and these tokens have real use cases and large communities.

But outside those two and the smart contract platforms, the gains of the other four this week ̶Telcoin, Safemoon, Gatetoken, and LEO token ̶remain somewhat mysterious.

Telcoin has become almost 8 times more valuable since it launched on the Polygon-native Quickswap Exchange.

Safemoon has shown surprising resilience despite its lack of utility, aside from increasing in value that is. A hint may be found in Safemoon Web Developer Jacob Smith’s tweet on May 8, which features a video in which the Safemoon logo is superimposed on a man, who is being lifted by other men with the logos of Discord, Reddit and Twitter superimposed over their faces.

The Safemoon project has sprung out of nowhere, seemingly riding a wave of immense social media success. It’s founder has 162K followers on Twitter just despite joining only in March.

Gatetoken characterizes itself as a “blockchain dedicated to fund safety and decentralized exchange.” This is both not specific enough and too specific, and are also features and applications Ethereum already has. The exchange, Gate.io, which launched the token, says token holders will gain privileges like “VIP tier escalation,” on its website.

LEO token, previously UNUS SED LEO, functions as an exchange token which gives discounts to holders on iFinex platforms, primarily Bitfinex. Bitfinex’s daily volume has more than doubled from $2.2M a week ago to over $5M, which may account for the token’s rise.

As the entire crypto market cap is up 71% in the last 90 days, reaching $2.44T, it’s been seen in the past, that all tokens, whether they have strong fundamentals or not, can latch on to that broader rise. For serious crypto entrepreneurs, traders and users, these gains can seem arbitrary and irritating, but it also signals that new investors are getting involved, bringing crypto to a wider and wider audience.

[CORRECTED MAY 13 TO UPDATE DESCRIPTION OF LEO TOKEN]