Is there really no one in need of blockchain? When financial infrastructure becomes a pipeline, where does the narrative of cryptocurrency go?

Original Title: No One Needs Blockchain

Original Author: 100y, Four Pillars

Original Compilation: Deep Tide TechFlow

Deep Tide Guide: As Kalshi receives regulatory approval in the U.S. to launch single-stock perpetual contracts, the trading volume in prediction markets reaches historic highs, and the settlement scale of stablecoins surpasses one trillion dollars, the crypto industry seems to be ushering in an unprecedented wave of mainstream adoption. However, behind this apparent prosperity lies a hidden and harsh reality: these highly sought-after phenomenal products have core business logic that is almost entirely unrelated to blockchain.

100y sharply analyzes the "pipeline dilemma" faced by the current crypto ecosystem. Whether it is the compliance prediction markets with centralized matching and clearing or the RWA and stablecoins relying on traditional financial backends, blockchain merely serves as the underlying financial pipeline for fund access and asset circulation. More critically, according to historical patterns of technological diffusion and value accumulation, commercial value is being completely siphoned off by distribution platforms that control end users, while the underlying blockchain infrastructure and token economics fail to capture the true value return.

This article not only systematically sorts out the structural similarities and differences between Kalshi and Polymarket, as well as the polarization pattern of the on-chain track in 2026, but also directly explores the ultimate way out for the crypto industry. When the "next-generation financial pipeline" is insufficient to support the industry's vision, what kind of native applications do we need to redefine the true value of blockchain that is irreplaceable?

This article records some scattered thoughts I recently had about the blockchain industry. It builds on the logic of my previous article "Why Today's Crypto Businesses All Look Alike."

Image: Kalshi receives CFTC approval to launch single-stock perpetual contract trading (Source: Kalshi official website)

Today marks a significant announcement for the crypto industry. The U.S. Commodity Futures Trading Commission (CFTC) announced that it will allow trading of single-stock perpetual futures (i.e., equity perpetual contracts).

This is not just a regulatory policy announcement. The compliant exchange Kalshi actually launched the real-time trading function for stock perpetual contracts on the same day.

But wait a moment. Is this really news for the crypto industry?

Understanding Kalshi: Misunderstood "Crypto Natives"

It is well-known that Kalshi is a centralized derivatives exchange regulated by the U.S. CFTC, providing prediction market and perpetual contract trading services.

People tend to view Kalshi as a company deeply tied to the blockchain industry. But the harsh reality is that Kalshi's actual connection to blockchain is surprisingly limited.

Kalshi does not use blockchain technology to drive its core products, including its prediction markets and perpetual contracts. Orders are matched off-chain through its proprietary matching engine, while clearing and settlement are uniformly handled by Kalshi Klear, a derivatives clearing organization registered with the CFTC.

The actual connection between Kalshi and blockchain is quite limited. Users can deposit and withdraw using stablecoins, and their prediction market positions can be tokenized and seamlessly accessed through Solana-based platforms (such as DFlow and Jupiter).

So, why do people associate Kalshi so closely with the blockchain industry? I believe there are several core reasons.

First, it is a direct competitor to Polymarket. When Polymarket initially offered prediction markets to users outside the U.S., it indeed used the Polygon network and UMA oracles as underlying components to adjudicate market outcomes and settle trades.

This has led to a profound stereotype that prediction markets themselves are a core component of the blockchain industry. However, even the U.S. version of Polymarket, which operates under CFTC regulation, has almost no technical connection to blockchain, just like Kalshi.

Second, John Wang joined Kalshi. In August 2025, John Wang officially became the head of crypto business at Kalshi. Previously, he was a researcher at the top crypto venture capital firm Paradigm.

Finally, the launch of perpetual futures. Perpetual contracts are another financial primitive that people often subconsciously associate with blockchain, following a similar cognitive path as prediction markets. This association is not without reason.

Perpetual contracts originally emerged as a new type of trading tool within cryptocurrency exchanges. The 24/7 trading nature of crypto assets makes it a natural breeding ground for perpetual contract mechanisms.

We now also have excellent purely blockchain-based decentralized perpetual exchanges like Hyperliquid and Lighter. Therefore, perpetual contracts indeed have deep roots in the crypto world.

But from a purely technical architecture perspective, providing perpetual contracts does not require blockchain at all. Strictly regulated U.S. compliant exchanges like Kalshi and Coinbase do not use any blockchain technology when executing or clearing their perpetual contract trades.

The core bottom line is quite clear: prediction markets and perpetual futures are trading products with deep roots in the crypto industry, but neither fundamentally requires blockchain to exist.

Blockchain is Becoming a Pure Financial Underlying Pipeline

Image: The polarization pattern on-chain in 2026 and the evolution of financial infrastructure into a pipeline

In my previous article, I argued that the on-chain ecosystem is becoming increasingly polarized. Looking at the performance of major tracks in 2026, the overall industry picture has become quite clear.

On-chain native tracks like native DeFi are performing poorly. Meanwhile, tracks that achieve meaningful growth are essentially concentrated in two extreme directions.

On one end of the scale are speculation-driven tracks, such as prediction markets, perpetual futures, and meme coins; on the other end are tracks closely connected to traditional finance, including stablecoins, real-world assets (RWA), and on-chain vaults.

Considering that 2026 is one of the most challenging years in the history of the crypto industry, the fact that these tracks can still achieve significant growth indicates that they have at least found a true product-market fit (PMF) to some extent.

At first glance, these two extreme tracks seem completely different. However, they actually share a critically important common feature: the vast majority of them simply use blockchain as a financial underlying pipeline.

As we discussed earlier, prediction markets and perpetual futures fundamentally do not need blockchain to exist. Blockchain primarily provides infrastructure utility for deposits, withdrawals, and asset tradability.

The same goes for meme coins. Blockchain allows anyone to issue tokens and trade them publicly at an extremely low cost, and this is essentially where its true core utility lies.

On the other end of the scale, stablecoins and RWAs also primarily view blockchain as the next-generation financial pipeline, replacing the outdated and inefficient backend settlement infrastructure of the traditional financial system.

It is important to clarify that I am not denying the immense value of financial pipelines. On the contrary, this value is evident.

A global financial backend that allows anyone to trade and use a wide range of assets 24/7 represents a significant leap compared to traditional financial infrastructure. Just this capability alone is a core differentiating advantage.

However, there is a phenomenon that I find particularly thought-provoking: in the tracks where blockchain truly finds PMF, blockchain itself is almost never the core pillar of the business model. The core pillar often lies elsewhere.

The real business logic is actually located elsewhere; blockchain merely makes this business easier, faster, or lowers the barriers to entry.

Value Concentrating on Distribution Layers: Where Does the Blockchain Industry Go from Here?

Image: Comparison of the value capture curves of technological origins and distribution channels (Source: The Commanding Heights)

A recent article titled "The Commanding Heights" has garnered significant attention in the San Francisco venture capital circle, presenting a profoundly insightful argument.

Historically, commercial value does not necessarily settle where a technology originally originates. Value tends to concentrate heavily where the distribution channels of that technology are controlled. The article argues that the AI industry will follow the same evolutionary trajectory.

I believe this phenomenon is already vividly playing out in the crypto world. Blockchain has indeed found PMF, but the problem is that the value created has not flowed back into the on-chain ecosystem or the underlying crypto infrastructure.

The vast majority of commercial value is being captured by front-end distribution platforms that directly own user relationships. For these platforms, blockchain is not the core business logic; it is merely another ordinary feature in their product functionality stack.

So, where should the blockchain industry go from here? Currently, blockchain has proven its utility as a financial pipeline and has found a foothold in that role. But I believe we need much more than that.

We need those "truly irreplaceable" native businesses. In these businesses, blockchain should not merely be a tool providing auxiliary support, but must sit at the very center of its core business logic.

Of course, we have experienced this narrative before. Many once-ambitious projects started with such aspirations, attempting to build disruptive products that could only exist on blockchain and were fundamentally different from previous things.

However, most of those projects have long since disappeared. Even so, I believe we must continue to explore this direction with full force.

If the utility of blockchain remains confined to serving as the "next-generation financial pipeline," then in the tide of hyper-financialization, the blockchain industry is highly likely to ultimately become just one of many mediocre financial infrastructure providers.

To be fair, this is not a bad outcome. But if we hope for the blockchain ecosystem to grow into something far larger and greater than it is today, we must provide a more compelling answer.

Perhaps in the future, a completely new category of native applications will emerge that exceeds all our expectations to solve this problem; or, the catalyst for breaking the deadlock may not come from the technology itself, but rather from the evolution of political or social landscapes fundamentally reshaping the public's perception of blockchain, thereby allowing existing native applications to regain the spotlight.

I do not know which path the future will take, but I firmly believe that this is precisely the focus that each of us should closely observe at this moment.