Consumption Chain Project: Innovation or Repeating Mistakes?

In recent years, numerous projects centered around the concept of "consumption chain" have emerged in the blockchain industry, aiming to attract more traditional internet users into the Web3 world by simplifying operational processes and lowering entry barriers. A well-known consumption chain project, as the first consumer Layer project in a specific ecosystem, has quickly garnered the attention of millions of users due to its innovative technological features and functionalities.

However, as the project progresses, the feedback from users and the market shows a polarized trend: on one hand, the project's technological innovation and user growth are remarkable; on the other hand, some users question its business model due to losses incurred from participating in activities. This article will take this project as an example to explore the essence of the consumption chain: is it a pioneer of industry transformation, or just a tool for harvesting profits without any real change?

1. Technological Innovation and Achievements

Technical Breakthrough: Ecological Compatibility and Integration

The greatest highlight of this project lies in its technical compatibility, which allows developers to build applications in a specific ecosystem using familiar programming languages, greatly reducing the development threshold. At the same time, the project simplifies the process for users to enter Web3 by tokenizing Web2 users' points into on-chain assets. This technological integration not only brings new liquidity to the specific ecosystem but also provides seamless on-chain experiences for hundreds of millions of users.

User Growth and Ecosystem Expansion

Since the launch of the testnet, the project has attracted more than 5.3 million users' attention, with the number of paying users in the testnet activities exceeding 1 million and the on-chain transaction volume surpassing 29 million. After the mainnet launch, the number of active wallets quickly exceeded 1 million, and the on-chain transaction volume exceeded 5 million, demonstrating a strong user growth momentum. In addition, the project has also partnered with several well-known platforms, further expanding its ecological landscape.

Token Economics and Incentive Mechanisms

The total supply of the project's token is 10 billion, of which 77% is allocated to community and ecological development, including 50% for airdrops, 20% to support ecological development, and so on. This incentive mechanism aims to attract users to participate through airdrops and staking activities while providing financial support for ecological projects.

II. Behind Users' Losses: Concerns of the Consumption Chain

The activity rules are complex, and the cost of participation for users is high.

Although the project has attracted a large number of users through airdrop and staking activities, some users have reported that the rules of the activities are complex and the costs of participation are relatively high. For example, users need to stake a certain amount of assets to receive airdrop rewards, and in situations of significant market volatility, the value of the staked assets may decline sharply, resulting in actual returns for users being lower than expected. This design has been questioned by some users as a disguised way of exploiting them.

Limitations of Tokenization of Points

The tokenization feature of the project's points, while lowering the barrier for users to enter Web3, has limited practical application scenarios. Currently, tokenized points are mainly used for paying Gas fees and participating in on-chain activities, and have not yet formed a wide range of consumption scenarios. This limitation may lead users to doubt the long-term value of the project.

Insufficient ecological liquidity

Although the project is committed to integrating liquidity from multiple ecosystems, the DeFi protocols and applications within its ecosystem are still in the early stages, with relatively insufficient liquidity. This fragmentation of liquidity may limit users' actual experience, thereby affecting the project's long-term development.

3. The Essence of the Consumption Chain: Industry Transformation or Shell Game to Harvest Investors?

The potential for industry transformation

The core goal of the consumption chain is to lower the barriers for users through technological innovation, promoting the migration of Web2 users to Web3. The project's technological compatibility and points tokenization features embody this concept. This compatibility not only facilitates a smooth transition of existing Web2 applications into the Web3 ecosystem but also provides developers with more powerful tool support, enhancing user experience and application adoption rates. If it can effectively address the issues of insufficient liquidity and limited application scenarios, the consumption chain is expected to become a catalyst for large-scale application in the blockchain industry, promoting the comprehensive development of the decentralized economy.

The risk of being chopped in the market

However, the incentive mechanisms and business models behind the consumption chain can also be easily abused. Some projects may attract user funds through complex participation rules and high entry costs, ultimately leading to losses for investors. This phenomenon of "cutting leeks"—luring with high returns at the expense of user funds—is not new in the blockchain space, especially in the absence of effective regulation, which may exacerbate irrational speculative behaviors in the market and harm the interests of ordinary users. Therefore, ensuring the transparency, sustainability, and protection of user rights within the consumption chain mechanism, building user trust, and ensuring the healthy development of the market have become key challenges for its future development.

4. Case Insights: The Dilemma and Path of the Consumption Chain

The double-edged sword of tokenomics design

The token economic model of the project is at the center of its controversy. Although it allocates most of the tokens to the community in an attempt to attract user participation through high incentives, historical data from airdrops shows that over 88% of the tokens depreciated significantly due to selling pressure within three months after the airdrop. This model may quickly accumulate users in the short term, but if it lacks actual application scenarios to support it, the token value becomes difficult to maintain, ultimately leading users to suffer losses due to asset depreciation. For example, users in the project's testnet activities charged a large number of points, but the usage scenarios after tokenization were limited to paying Gas fees and staking, failing to form a consumption closed loop.

The distinction between virtual and real in technological integration

The technological innovation of the project, although packaged as "industry revolution", still needs to be validated in terms of actual implementation effects. For example, its claim of "integrating multi-ecosystem liquidity" relies on cross-chain bridges and incentive mechanisms, but the total locked value (TVL) of specific ecosystems is relatively low, indicating a weak underlying support for liquidity integration. Furthermore, although the development threshold has been lowered through specific architectures, the decentralized applications in the ecosystem are still primarily simple applications, lacking complex applications.

Community-driven sustainability challenges

The "fun community culture" of this project is a highlight of its user growth, attracting millions of users through gamified interactions. However, this model is highly dependent on short-term incentives, raising concerns about user retention. Data shows that while there was a large number of users participating during the testnet phase, the growth rate of on-chain transactions slowed after the mainnet launch, indicating that user activity may decline with the end of the airdrop. In contrast, a mature consumption chain needs to build a mechanism for long-term value capture, such as converting user behavior into on-chain productivity through DeFi protocols, rather than relying solely on a "traffic-airdrop" cycle.

V. The Future of the Consumption Chain: From "Traffic Games" to "Value Networks"

Return to the essence of user needs

The core proposition of the consumption chain should be to lower the threshold for using Web3 and create real demand. Tokenizing points to allow users to "seamlessly go on-chain" is an important attempt, but if it only stays at the level of paying Gas fees, it is no different from Web2 point systems. In the future, application scenarios need to be expanded, such as using tokens for social tipping, content subscriptions, and other high-frequency consumption behaviors, forming a "points-consumption-revenue" closed loop.

Deepening the technology of liquidity integration

Current cross-chain liquidity integration largely relies on bridging protocols, but security and efficiency issues are prominent. To truly break the ecological isolation, it's necessary to explore more fundamental solutions, such as utilizing ZK technology for lightweight cross-chain verification, or aggregating multi-chain assets through a unified liquidity pool. At the same time, introducing real yield protocols (such as lending and derivatives) can enhance capital utilization and avoid "false prosperity" in liquidity.

Building a Regulatory and Compliance Framework

The vision of "mass adoption" for the consumption chain needs to confront regulatory challenges. For example, points as a fiat currency entry may involve KYC/AML issues, and the financial attributes of tokenized points may also fall under securities regulation. Projects need to collaborate with compliance agencies to explore the integration of on-chain identity and compliant payment channels, rather than merely relying on "regulatory arbitrage."

VI. Conclusion

The case of this consumption chain project reflects a typical contradiction in the consumption chain track: on one side is the innovative potential of technological integration and user growth, while on the other side is the bubble of token economics and short-term profit-seeking risks. Its future success will depend on whether the expansion of application scenarios can evolve from simple memes and games to high-frequency demands such as social and financial needs, whether the so-called liquidity cross-chain integration can truly enhance capital efficiency instead of just staying on the surface accounting data, and whether its community governance can shift from the short-term interest-driven "wool-pulling party" to active ecological co-builders participating in long-term value distribution.

If a consumption chain project only uses "lowering the threshold" as a pretext for "traffic harvesting," it will inevitably become a tool for "shell swapping and cutting leeks"; only by deeply binding technological innovation with user value can it secure a place in the industry transformation.