Real Vision Founder: Why Most Public Chains Are Doomed to Fail?

In your portfolio, there must be at least one public chain you bought during the last cycle because you believed it would become the next Ethereum. Better technology, combined with the founder's highly persuasive arguments on podcasts... You weren't foolish for buying it; many smart people did the same.

But looking back now, that chain has essentially become a ghost town. Only a handful of validation nodes remain operational, with hundreds of wallets ping-ponging small amounts of tokens back and forth, while the token price has long fallen far below the buy-in costs of its believers.

According to CoinGecko data, over 13 million tokens had stopped trading by the end of last year, with the vast majority dying out in 2025. Many of the underlying public chains they relied on suffered the same fate.

For the past thirteen years, I've seen similar takes on social media during every bear market. Cryptocurrency is a scam, it's always been a casino, I told you so.

But this mass extinction isn't a scandal; it's simply basic probability.

I wrote this in December 2020, when I thought it was obvious, but others didn't see it that way. Tokens are merely VC-marked-to-market products in real time. If you hold early-stage seed round projects and the underlying assets are repriced every second, you see the exact same outcome: roughly 80% go to zero, 19% create some value, and only 1% capture the vast majority of returns. The crypto market just livestreams this process to everyone, and this real-time price volatility easily induces panic.

At the time, I applied these standards to myself as well. If Real Vision had been valued in real time every single day since its founding, I imagine its value would have nearly hit zero six times. A project's value stems from adoption, which ultimately stems from revenue, and the vast majority of projects never reach that stage. Most projects don't survive. That's reality. Like it or not, that's capitalism.

So the real question has never been whether most public chains will die out; they inevitably will. The real question to ponder is: which ones will survive, and how can we identify them before prices give the answer?

We Have Witnessed the Same Script Before

Twenty-one years of writing experience have taught me to look for precedents, and the key precedent to keep in mind here is the bursting of the dot-com bubble.

In November 2018, when Bitcoin was in a deep bear market, I wrote that this scenario closely mirrored the 2000–2001 dot-com bubble: grand ideas, but flawed business models. In the end, phoenixes rise from the ashes. I was certain at the time that the crypto market would repeat this cycle, though I couldn't tell which projects were phoenixes and which were mere ash—which I stated plainly then as well.

Admitting that prediction is impossible is the correct stance, because in 2000, nobody could pick the ultimate winners. There was massive overbuilding of infrastructure back then, and the Nasdaq index plummeted 78% from its peak within two and a half years, wiping out the value of the vast majority of assets. Yet, a handful of companies that rose from the ashes leveraged the fiber-optic infrastructure built by bankrupt firms to grow into the world's largest enterprises. Looking back, the crash was merely a brief detour on the path upward; being in the middle of it, however, makes it feel like the entire industry's premise has come to an end.

All major platform markets since then have followed the same trajectory. Cloud computing now has roughly five dominant players; the OS and mobile phone sectors are similarly structured, with the vast majority of value concentrated among the top four. Public chains are fundamentally the same type of platform market.

A Public Chain Is an Economy, Not Just a Token

Since it belongs to a platform market, what is its product? The answer is simple: blockspace.

Winners make their own blockspace more attractive through technology or narratives—or both—drawing more users and capital to circulate on-chain. Everything else is just marketing packaging.

This is why you cannot view generic public chains as companies, nor simply as tokens. Ethereum, Solana, and Sui are independent economies, each with its own GDP, money supply, and monetary policy. Evaluating them should be done like evaluating an economy—by measuring the actual economic activity generated on-chain.

Four Paths to Survival

The competitive landscape is far simpler than most realize. For a project to survive, there are only four paths:

First, become an independent economy. Ethereum, Solana, Sui, and a few other public chains possess sufficient throughput, composability, and developer density to host a global token economy.

Second, pursue a vertically specialized route. Hyperliquid is the prime example; it's a unified exchange that just happens to use a public chain as its execution layer. Specialized exchanges often achieve profitability, but their revenue ceiling is constrained by their niche market. They should be valued like exchanges with deep moats, not as open-ended economies without limits.

Third, operate as a Layer 2 network. Building businesses on top of an L1 public chain means renting underlying security guarantees. Some Layer 2s will become high-quality ventures, but they are fundamentally franchises, akin to stores opening on Shopify. Even if an L2 fails, its on-chain state can be migrated elsewhere. This is precisely why they cannot accumulate value like foundational public chains: L1s offer data persistence guarantees, while L2s merely rent space.

The fourth category is somewhat special: BNB. The market prices it as an independent economy, but it isn't one. Because it isn't decentralized, its true underlying guarantee is Binance's balance sheet. It's a solid business, but essentially a centralized platform token wearing an L1 shell.

Why Most Public Chains Cannot Escape Extinction

The vast majority of remaining public chains—namely the countless projects launched over the past two cycles—do not fit into any of the above four categories. They are generic public chains trying to compete with independent economies but lacking the conditions to win; they aren't specialized enough to dominate a niche track; nor are they centralized enough to leverage a major platform's balance sheet. They are merely "a public chain." Public chains without moats will ultimately see their value drop to zero.

This is the structural root cause. On a practical level, what truly kills them is their token issuance and listing mechanism.

Since the summer of 2024, I've been studying low-float, high-FDV tokens, and this rule hasn't changed: markets despise such assets. In the early stages of a token listing, the circulating supply is tiny, often causing an immediate drop of 70% or more as markets front-run future unlocking sell pressure. In bull markets, low-float tokens can surge if backed by genuine demand. But when bear markets arrive, unless unlocks are largely complete or demand is genuinely sustainable, these assets severely underperform. And for public chains without moats, demand is never real. They only gain short-term hype, but translating that hype into long-term adoption is difficult; most hype vanishes almost instantly.

Thus, the issuance structure merely accelerates the path to zero for these homogenized public chains. Even without issuance mechanism issues, the market would ultimately deliver the same result.

The Race Toward Zero Cost

Most industry valuation frameworks fail here.

The core dimension of public chain competition is operational efficiency. This means that the chains winning collaborative competition will inevitably drive the marginal cost per transaction closer and closer to zero. If calculated using a discounted cash flow model, the conclusion would ironically be that leading public chains are worth less than challengers because they earn the lowest fees per transaction. This model yields a completely inverted answer.

To evaluate public chain value, you must think backward. Imagine shutting down Ethereum: all Layer 2 networks freeze, most stablecoin markets vanish, all DeFi, NFTs, and tokenized assets are impacted, and the financial system loses the possibility of building the future atop this infrastructure. This is Ethereum's true value. Nobody evaluates the TCP/IP protocol by tallying up the revenue of each individual packet. To evaluate it, you look 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 previously wrote about how AI agents cannot use traditional banking systems and must rely on these on-chain channels for settlement. Agents have no inherent preferences; each time they will automatically select the cheapest, fastest, and most efficient network. As soon as a lower-cost option appears, they will immediately abandon higher-fee public chains. Solana and Sui have already pushed stablecoin transfer costs to near zero, which is literally Metcalfe's Law playing out before our eyes.

Some businesses require the foundational security of Ethereum, while others only pursue extreme speed. Therefore, different public chains cater to different scenarios, and the market structure will be dominated by the top players rather than a single monopoly. However, trailing public chains do not qualify for a slice of the pie.

Everyone Is Misreading the Metrics

I can explain why the industry's measurement standards are inherently flawed; I have stepped into this very trap myself.

Earlier this year, I planned to build an L1 public chain valuation framework. Like every other analyst, I started with Fully Diluted Valuation paired with the metrics everyone tracks: Total Value Locked (TVL), fee revenue, DEX volume, and stablecoin market cap. The data correlations looked high, and I thought I had found the right approach at the time.

But that wasn't the case; the entire logic is circular reasoning. TVL is denominated in the very token being valued; DEX volume fluctuates with speculative sentiment, and fees fluctuate with volume. It's equivalent to using data derived from token prices to explain token prices. We are merely observing the surface, not the underlying reality.

So I stripped out price interference and converted everything into ratios unaffected by coin prices. Using the January 2025 peak and data covering 12 public chains, I asked only one question: is there a metric that can predict which public chains will decline the least over the next 13 months?

Fee yield rates have zero predictive power. Bull market fees only reflect speculative heat, not genuine value creation. The TVL/FDV ratio (crypto P/B ratio) is equally useless.

The only metric correlated with asset returns is capital turnover rate: the speed at which funds circulate in on-chain exchanges. But the correlation is inverse. In January 2025, Solana's capital circulation velocity reached 200 times its TVL, while Ethereum was only 7 times. The faster a public chain's capital turnover, the worse its performance over the following 13 months; public chains where funds settle and remain exhibit stronger downside resistance.

My current understanding is that turnover represents entropy increase, while fund stickiness represents order. When funds enter and settle, used for lending, swapping, and restaking, they continuously establish economic ties and attract more capital. Fast-in-fast-out funds merely treat the chain as a casino, leaving no residue after the trend fades. Thus, the high trading volumes chased at bull market peaks are actually risk warnings; public chains that appear calm with long-term fund retention are instead the ones capable of weathering downturns.

Characteristics of Survivors

From this, I distilled three key observation dimensions, all unrelated to price:

First, whether single-user economic density holds during sharp price crashes. Between the December 2024 peak and February 2026, the token price of a public chain I tracked fell by 83%, TVL dropped 78%, and active addresses shrank by three-quarters. Yet, the deployed capital per active user barely changed: ~$2,100 at the peak, and still ~$2,100 at the trough. Speculative tourists and bots exited, but the remaining users continued conducting economic activity at the same scale. Among the public chains I tracked, only three L1s maintained this density metric during the downturn: Ethereum, Solana, and Sui. For all other public chains, user economic density contracted in sync with falling prices; one well-capitalized mainstream L1 saw its user economic density shrink by 83%, meaning remaining users had essentially halted all on-chain activity.

Side note: I am indeed employed by the Sui Foundation. But I only discovered Sui ranked among these three after completing the data analysis. Data doesn't lie.

Second, whether stablecoin balances can continue to grow during token declines. The on-chain value of USD stablecoins does not shrink alongside the native token. If USD capital continues to flow in and settle during a bear market, it signals that external capital has made a long-term choice. All three of these public chains saw stablecoin balance growth during the downturn; notably, even the chain whose price crashed 83% still saw its stablecoin market cap expand by roughly half.

Third, continuous developer inflow, which is my highest-weighted metric. Developers represent the scarcest capital for public chains. Users can withdraw their funds entirely within minutes; developers spend years learning specific languages and architectures, making migration costs extremely high. During bear markets, sustained developer migration toward a particular public chain indicates that the most knowledgeable professionals in the industry are making a high-conviction choice despite enormous switching costs. Price charts will never capture this.

Growing wallet counts, increasing on-chain transaction value, developers entering first, and all these metrics holding steady during drawdowns—that defines assets capable of navigating cycles. Only those meeting this criterion warrant deep research; otherwise, what you're holding is merely a commoditized token.

The S-curve growth for these assets may feature drawdowns of 90% along the way. But the few surviving projects will eventually see exponential gains over the long term, continually setting new highs. After tens of thousands of projects undergo life-and-death filtering, network effects kick in, and the entire ecosystem takes off.

There will be more and more projects in the long tail, with massive token issuances in every cycle. Many people endlessly fantasize about finding 100x gems amidst countless long-tail projects, yet overlook the mainstream opportunities right in front of them. Focus on adoption, not token prices.

The vast majority of projects will ultimately die out. The few survivors are the true core of the entire game.

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