Most public blockchains will ultimately go to zero, and only four paths remain for survivors: becoming an independent economy, vertical specialization, layer 2 networks, or relying on centralized platforms. How Ethereum, Solana, and Sui navigate the cycle depends on three key metrics: user economic density, stablecoin retention, and developer inflow. Say goodbye to coin price noise and identify the true survivors.
Written by: Raoul Pal, Founder of Real Vision
Compiled by: Chopper, Foresight News
In your portfolio, there is certainly a public blockchain you bought in the last cycle because you thought it would become the next Ethereum. Better technology, plus a founder with highly persuasive rhetoric on podcast shows... You were not foolish when you bought it; plenty of smart people did the same.
But looking back now, this chain is basically a ghost town. Only a few validator nodes are still running, a few hundred wallets are transferring small amounts of tokens back and forth, and the token price has long fallen far below the believers' purchase cost.
According to CoinGecko, as of the end of last year, more than 13 million tokens had stopped trading, the vast majority of which died in 2025. And many of the public blockchains they relied on have fallen into the same fate.
Over the past thirteen years, in every bear market I have seen similar views on social media. Cryptocurrency is a scam, it has always been a casino, I told you so long ago.
But this mass extinction is not a scandal, it is just base rates.
I wrote this in December 2020, when I thought it was obvious, but others did not think so. Tokens are merely the product of venture capital being marked to market in real time. If you hold an early seed-round project and the marked price is repriced every second, you will see exactly the same result: about 80% ultimately go to zero, 19% can create some value, and only 1% capture the vast majority of the returns. The crypto market just livestreams this process for everyone to see, and this real-time price volatility easily makes people panic.
At the time I also examined myself by this standard. If Real Vision had been valued in real time every day since its founding, I suspect its value would have nearly gone to zero about six times. A project's value comes from adoption, and ultimately from revenue, and the vast majority of projects will never reach that stage. Most projects do not survive. This is reality, whether you like it or not, this is capitalism.
So the real question has never been "will most public blockchains die," they will die. What really needs to be considered is: which ones can survive, and how to identify them in advance before the price gives the answer.
We have seen the same script before
Twenty-one years of writing experience has taught me to look for precedents, and the precedent to remember here is the dot-com bust.
In November 2018, when Bitcoin was in a deep bear market, I wrote that this scene was extremely similar to the 2000 and 2001 dot-com bubble: grand ideas, but flawed business models. But in the end, a phoenix would rise from the ashes. I was certain at the time that the crypto market would repeat this process, but I could not tell which projects were phoenixes and which were just ashes, and I stated that honestly at the time as well.
Admitting that one cannot predict is the correct answer, because in 2000, no one could pick out the final winners. Back then infrastructure was overbuilt, the Nasdaq index plunged 78% from its high in two and a half years, and the vast majority of stocks went to zero. But the few companies that rose from the fire, relying on the fiber-optic infrastructure built by those failed companies, grew into the largest companies in the world. In hindsight, the crash was just an interlude on the way up; when you are in the middle of it, however, it feels like the entire industry's thesis is coming to an end.
Every large platform market since then has ended the same way. In cloud computing, only about five top players remain; operating systems and mobile phones are similar, with the vast majority of value concentrated in the top four. Public blockchains and these platform markets are essentially the same.
A public blockchain is an economy, not just a token
Since it is a platform market, what is its product? The answer is simple: blockspace.
Winners will make their own blockspace more attractive through technology or narrative (or both), attracting more users and capital to circulate on-chain. Everything else is just marketing packaging.
This is why general-purpose public blockchains cannot be viewed as a company, and even less simply as a token. Ethereum, Solana, and Sui are all independent economies, with their own GDP, money supply, and monetary policy. They should be evaluated like an economy — by looking at how much economic activity is actually generated on-chain.
Four ways to survive
The competitive landscape is far simpler than everyone imagines. If a project wants to survive, there are only four paths:
First, become an independent economy. Ethereum, Solana, Sui, and a few other public blockchains have sufficient throughput, composability, and developer density to support the global token economy.
Second, take the vertical specialization route. Hyperliquid is the most typical example: it is an integrated exchange that just happens to use a public blockchain as its execution layer. Specialized exchanges can often be profitable, but their upside is constrained by the niche, and they should be valued as exchanges with deep moats, not as an open-ended economy without a ceiling.
Third, operate as a layer 2 network. Build business on top of a layer 1 blockchain and rent the underlying security. Some layer 2 networks will become good businesses, but they are essentially franchises, like stores opened on Shopify. Even if an L2 dies, its on-chain state can be migrated elsewhere, which is exactly why they cannot accumulate value like underlying public blockchains: L1 has data persistence guarantees, L2 only rents it.
The fourth category is special: BNB. The market prices it as an independent economy, but it is not. Because it is not decentralized, its real underlying guarantee is Binance's balance sheet. This is a good business, but it is essentially a centralized platform token dressed up as an L1.
Why most public blockchains cannot escape extinction
The vast majority of remaining public blockchains — that is, the large number of projects launched in the last two cycles — do not belong to the four categories above. They are general-purpose public blockchains that want to compete with those independent economies but do not have the conditions to win; they are not specialized enough to occupy a dedicated niche; and they are not centralized enough to rely on a large platform's balance sheet. They are merely "a public blockchain." A public blockchain without a moat will ultimately go to zero.
This is the structural root cause. And at the operational level, what really kills them is the token launch mechanism.
Since the summer of 2024, I have been studying low-float, high fully diluted valuation (FDV) tokens, and this pattern remains unchanged: the market hates this kind of asset. When a token initially lists with a very small circulating supply, it often directly crashes 70% or more, as the market prices in the subsequent unlock selling pressure in advance. In a bull market, if there is real demand behind it, a low-float token can soar. But when a bear market arrives, unless unlocks are basically complete or demand is genuinely real and sustainable, this kind of asset will severely underperform the broader market. And for public blockchains without moats, demand is never real. It only gains short-term hype, but hype is hard to convert into long-term adoption, and the vast majority of hype is fleeting.
So the issuance structure only accelerates the process of these homogeneous public blockchains going to zero. Even without the issuance mechanism problem, the market would eventually produce the same result.
The race toward zero cost
Most valuation frameworks in the industry fail here.
The core dimension of competition among public blockchains is operating efficiency. That is, the public blockchains that win the coordination competition will inevitably keep pushing the marginal cost of a single transaction toward zero. If you plug that into a discounted cash flow model, the conclusion is instead that leading public blockchains are valued lower than challengers, because they earn the least in fees per transaction. This model gives a completely inverted answer.
To evaluate the value of a public blockchain, you have to think in reverse. Imagine if Ethereum were shut down, all layer 2 networks were paralyzed, most of the stablecoin market disappeared, all DeFi, NFTs, and tokenized assets were hit, and the possibility of the financial system building its future on this infrastructure no longer existed. That is Ethereum's value. No one evaluates TCP/IP by counting the revenue of each data packet. You evaluate it by looking at the entire internet running on top of it.
This competition will continue to accelerate, and a new class of users is about to enter. I explained in a previous post that AI agents cannot use the traditional banking system and must rely on this kind of on-chain channel to complete settlement. Agents have no inherent preferences; every time they will automatically choose the cheapest, fastest, and most efficient network, and once a lower-fee option appears, they will immediately leave the public blockchain charging higher fees. Solana and Sui have already pushed stablecoin transfer costs to near zero, which is Wright's Law playing out before our eyes.
Some businesses need the security of Ethereum's underlying layer, while some only pursue extreme speed. So different public blockchains carry different use cases, and the market structure is that the leaders occupy the vast majority of share, rather than winner-take-all. But tail-end public blockchains do not even qualify for a slice of the pie.
Everyone is looking at the wrong metric
I can explain why the industry's measurement standard itself is wrong. I once fell into this trap myself.Earlier this year, I set out to build a valuation framework for L1 public blockchains. Like every analyst, I started with fully diluted valuation paired with the metrics everyone tracks: total value locked (TVL), fee revenue, DEX trading volume, and stablecoin market cap. The data correlations looked strong, and at the time I thought I had found the right approach.
But that wasn't the case. The entire logic was circular. TVL is denominated in the very token being valued; DEX trading volume rises and falls with speculative sentiment; fees fluctuate with trading volume. It was essentially using data derived from token price to explain token price. What we were observing was only the surface, not the thing itself.
So I stripped out the price distortion and converted everything into ratios unaffected by token price. I took the January 2025 peak, covered data from 12 public blockchains, and asked only one question: is there any metric that can predict which public blockchains will fall the least over the next 13 months?
Fee yield had no predictive power whatsoever. Bull market fees only reflect speculative heat, not real value creation. TVL/FDV (the crypto version of price-to-book) was equally ineffective.
The only metric correlated with asset returns was capital turnover: the speed at which capital circulates through on-chain exchanges. But the correlation was inverse. In January 2025, Solana's capital turnover reached 200 times its locked value, while Ethereum's was only 7 times. The faster a public blockchain's capital turnover, the worse its performance over the following 13 months; public blockchains where capital settled and stayed showed stronger downside resilience.
My understanding now is that turnover represents entropy, while capital stickiness represents order. When capital comes in and settles down—used for lending, swapping, restaking—it continuously builds economic connections and attracts more capital. Capital that rushes in and out treats the chain merely as a casino and leaves no sediment behind when the market tide recedes. So the high trading volume everyone cheers for at the bull market peak is actually a risk warning; the public blockchains that look unremarkable, with capital settling for the long term, are the ones that can withstand a decline.
Characteristics of Survivors
From this, I distilled three key observation dimensions, all unrelated to price:
First, whether single-user economic density can hold when the token price crashes. From the December 2024 high to February 2026, one public blockchain I tracked saw its token price fall 83%, TVL drop 78%, and active addresses shrink by three-quarters. But the capital deployed per active user barely changed: about $2,100 at the peak, still $2,100 at the trough. Speculative tourists and bots left, while the users who stayed continued conducting economic activity of the same scale. Among the public blockchains I analyzed, only three L1s maintained this density metric through the downturn: Ethereum, Solana, and Sui. For all the others, token price declines were accompanied by shrinking user economic density; one well-funded mainstream L1 saw its user economic density shrink by 83%, meaning retained users essentially stopped all on-chain activity.
Incidentally: I do work at the Sui Foundation. But I only discovered that Sui was one of these three after completing the data analysis. Data doesn't lie.
Second, whether stablecoin balances can continue growing during a token decline. The value of dollar stablecoins on-chain does not shrink with the token. If dollar capital continues flowing in and settling during a bear market, it represents a long-term choice by external capital. All three public blockchains saw stablecoin balances grow during the downturn, and the one whose token price fell 83% still grew its stablecoin stock by about half.
Third, continuous developer inflow, which is also my highest-weighted metric. Developers are the scarcest capital for a public blockchain. Users can withdraw all their capital within minutes; developers invest years learning a specific language and architecture, making migration costs extremely high. During a bear market, developers continuing to migrate to a particular public blockchain represents the industry's most knowledgeable people making a high-conviction choice at extremely high switching costs. Price charts can never capture this.
Growing wallet counts, rising on-chain transaction value, developers entering first, and all these metrics holding up during drawdowns—this is what can survive cycles. Only when these conditions are met does deeper research become worthwhile; if they aren't, what you hold is just a commoditized token.
The S-curve growth trajectory of such assets may include a 90% price drawdown along the way. But the few projects that survive will, over the long term, achieve exponential gains and repeatedly hit new highs. After thousands of projects go through the life-and-death selection process, network effects take hold and the entire ecosystem takes off.
There will be more and more projects in the long-tail segment, with massive token issuance every cycle. Many people fantasize about finding a 100x coin among the vast long tail, while ignoring the mainline opportunity right in front of them. Focus on adoption, not price.
The vast majority of projects will eventually die. The few that survive are the core of the entire game.