Bitcoin investor Lark Davis has called Cardano, Polkadot, Ethereum Classic, and Arbitrum the most overvalued cryptocurrencies in the top 100 coins list. Despite carrying multi billion dollar valuations, these projects still show weak network activity and low revenue.
According to Davis, these networks have good technology in some cases, but their ecosystems have failed to generate enough demand to justify their market caps.
According to Davis, these networks have good technology in some cases, but their ecosystems have failed to generate enough demand to justify their market caps.
Cardano topped Davis’ list, as he pointed out that the network processes around 30,000 transactions per day, has only 10,000 daily active addresses, and generates roughly $2,000 in daily application revenue despite maintaining a market cap of around $6 billion.
Token Terminal data shows that Cardano aonly generate only $1.9 million in revenue fees, far behind networks like Solana and Tron, which generate more than $603 million and $581 million in weekly revenue, respectively.
Davis questioned why Cardano continues to carry such a large valuation if network usage remains relatively low. Meanwhile, ADA is trading near $0.162, still almost 95% below its all-time high.
Davis believes Polkadot’s biggest issue is not its technology but its token utility. He noted that Polkadot’s main chain records only around 2,400 daily active users, while its TVL remains close to $40 million.
By comparison, many competing Layer-1 and Layer-2 networks process significantly more users and lock billions of dollars in DeFi.
According to Davis, governance, staking, and coretime sales have failed to create enough real demand for the DOT token.
As of now, DOT currently trades around $0.838, down nearly 98.5% from its all-time high.
Davis also criticized Ethereum Classic, saying the blockchain has become a “ghost town.” Despite maintaining a market capitalization above $1.1 billion, Ethereum Classic has only around 1,300 daily active addresses, approximately $150,000 in TVL, and roughly $72,000 in on-chain stablecoins.
As of now, ETC trades near $6.97, almost 96% below its record high.
Lastly, Davis aimed for Arbitrum (ARB). While he acknowledged that Arbitrum has strong blockchain technology, he argued that the ARB token does not capture enough value because the revenue generated by Offchain Labs does not directly benefit token holders.
Although Arbitrum serves around 2.2 million monthly active users and generates nearly $570,000 in monthly revenue, Davis believes the governance token itself has very limited use. ARB currently trades near $0.0866, down more than 96% from its all-time high.
While Davis believes these projects remain heavily overvalued, supporters argue that market value is not based only on current activity.
Lark Davis
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