Economy

At first glance, blockchain ecosystems like Ethereum and Solana appear to be thriving—hosting hundreds of decentralized applications and protocols. But what if most of them are essentially inactive? According to recent data, a staggering 88% of Ethereum protocols and 75% of Solana protocols have generated zero revenue in the past 30 days. These are digital ghost towns—existing infrastructure with no economic return.

🔹 Digital Unemployment in Blockchain

This phenomenon resembles “hidden unemployment” in traditional economics—when a workforce appears employed but contributes nothing to actual economic output. On the blockchain, it’s the same story: hundreds of deployed projects that simply don’t generate value.

🔹 Ethereum and Solana Under the Microscope

Of the 1,200+ protocols on Ethereum, 1,121 didn’t earn a single cent in the past month—that’s 88%. On Solana, 75% of its 264 protocols were also inactive revenue-wise.

🔹 Hidden Costs: Storage and Security

Every smart contract, active or not, is permanently stored on the blockchain. This adds to the overall size of the network and increases bandwidth and hardware requirements for node operators. Additionally, abandoned contracts may contain vulnerabilities, creating potential security threats across the ecosystem.

🔹 Economic Waste and Poor User Experience

Developing these non-functional protocols required time, money, and effort—resources now locked in unproductive digital assets. These “ghost contracts” also clutter the ecosystem, making it harder for users to find reliable, active platforms and reducing overall trust in the blockchain space.

This doesn’t mean blockchains are doomed to inefficiency. But it’s a clear signal that better filtering, auditing, and support for value-creating protocols is essential. Without it, the decentralized revolution risks turning into a digital graveyard of unused ideas.

#blockchain , #economy , #solana , #Ethereumnetwork , #CryptoCommunity

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Japan experienced a political earthquake on Sunday. Prime Minister Shigeru Ishiba’s ruling coalition suffered a major defeat in the upper house elections — an outcome investors had already priced in. While the result wasn't entirely unexpected, it comes at a delicate moment: the country is facing tariff threats from the U.S. while trying to stabilize its domestic economy.
Preliminary estimates suggest the coalition has lost control of the upper house and, for the first time in years, will hold a minority in both houses of parliament.

💱 Markets Reacted in Advance
Although Japan’s markets were closed on Monday due to a holiday, investors began repositioning for risk last week.
🔹 The yen weakened against both the U.S. dollar and the euro.

🔹 Yields on 30-year Japanese government bonds surged to record highs.

🔹 Japan’s fiscal health remains fragile, and the deficit is likely to deepen.
“I won’t chase the coalition’s losing trades,” said Rong Ren Goh, a portfolio manager at Eastspring Investments. He noted that markets are now focused on U.S.-Japan trade talks, which could pose a major risk for Japan.

🧩 A Weakened Coalition Looks for a Path Forward
It remains unclear whether the ruling LDP will try to govern as a minority or seek a new coalition partner. One possibility is a pact with the Democratic Party for the People (DPP), which advocates for looser monetary policy and tax cuts in exchange for support.
Prime Minister Ishiba has so far rejected calls to step down, but internal party discussions are already underway. His likely successor? Sanae Takaichi, a proponent of Abenomics and further easing by the Bank of Japan.

💸 Taxes, Bonds, and a Growing Deficit
All three major opposition parties back lowering the consumption tax. The right-wing Sanseito party even proposes abolishing VAT entirely. But these measures would require more debt — a lot more.
With a national debt equivalent to 2.5 times GDP, Japan remains the most indebted advanced economy in the world.

Barclays analysts estimate that a 5% tax cut would push 30-year bond yields up by 15–20 basis points.
Even before the elections, Japan’s bond market was under pressure — long-term yields have risen by nearly 1% over the past year. Debt service costs now account for around 12% of the government’s revenue.

📉 Yen and Nikkei: Two Sides of the Same Coin
The yen traded between 140 and 160 per dollar in H1 2025. It spiked after the BoJ raised rates in January, but has remained flat since late April due to political uncertainty, tariff negotiations, and the BoJ’s cautious approach.
Traders are heavily positioned long yen, so any unexpected developments — snap elections, new leadership, or fiscal loosening — could trigger sharp declines.
On the other hand, the Nikkei 225 index is rising — since April 2, when President Trump unveiled his global tariff plan, it has gained over 11%. While the yen weakens, equities — for now — reflect optimism about stimulus and fiscal support.

🧠 One-Minute Summary
Japan is entering a period of heightened political instability. The ruling coalition has lost the upper house, putting planned reforms at risk. Markets had partially anticipated this, adjusting in advance. Now the focus shifts to key questions: Will Ishiba stay? Will there be a new coalition? And how will Trump respond if Japan misses the August 1 tariff deadline?

#JapanEconomy , #Politics , #economy , #GlobalMarkets , #Geopolitics

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Senator Elizabeth Warren is increasing pressure on the rapidly growing private credit market, warning that it could become the next source of financial instability. On Thursday, she sent strongly worded letters to the three largest credit rating agencies — S&P Global, Moody’s, and Fitch Ratings — and also reached out to Treasury Secretary Scott Bessent.

📩 Warren Warns of Another 2008 Crisis
In her letters, Warren recalled how overly optimistic credit ratings contributed to the 2008 financial collapse. She demanded transparency on how the agencies evaluate private credit products, how they manage conflicts of interest, and whether their methodology differs from how they rate traditional investment products.
She warned that excessively favorable risk assessments could once again lead to crisis — especially when lenders can choose their own rating provider.

🏦 White House Appears to Support the Sector
Ironically, the Trump administration seems to be moving in the opposite direction — supporting efforts to open up private credit opportunities to the public, such as through 401(k) retirement plans.
Warren also wrote a letter to Treasury Secretary Bessent, urging him to assess the potential financial stability risks posed by the size and opacity of the private credit market. She referenced a government report from last year that flagged vulnerabilities like lack of transparency and growing connections to banks and other financial institutions.

📉 JPMorgan: Private Credit Looks Like Pre-Crisis Mortgages
According to JPMorgan Chase CEO Jamie Dimon, today’s private credit market resembles the mortgage sector before the 2008 crash. He warned that not all players maintain sound lending practices, which could lead to problematic financial products.
Despite these concerns, JPMorgan has entered the space, allocating $50 billion from its investment banking unit to support its own private credit platform for acquisitions and other large-scale transactions outside traditional bank channels.

📊 Explosive Growth: From $11.6 Trillion to $30.8 Trillion
SEC Chairman Paul Atkins noted that private funds have grown from $11.6 trillion to $30.8 trillion over the past decade. He said this opens the door for retail investors seeking diversification and risk-adjusted opportunities that align with their time horizons.

🛠️ A New Lending Model: Railcars, Data Centers, and 10-Year Deals
Private credit giants like Apollo, Ares, and KKR are now creating custom lending structures — lending directly from their own funds, secured by unconventional assets such as railcars and data centers.
In return for locking in capital for nearly a decade, borrowers are often willing to pay significantly higher interest rates than they would through traditional banks — avoiding the complex and costly syndication process, credit ratings, and long waiting periods.
These loans are often investment-grade in credit quality, but due to their illiquidity premium, they command higher yields.

#ElizabethWarren , #WallStreet , #JPMorgan , #SEC , #economy

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“