Does Anyone Really Need Blockchain? When Financial Infrastructure is Reduced to Mere Conduits, Where Does the Crypto Narrative Head Next?

Author: 100y, Four Pillars

Compiled by: TechFlow

TechFlow Guide: When Kalshi receives US regulatory approval to launch single-stock perpetual contracts, prediction market trading volumes hit record highs, and stablecoin settlement scales exceed trillions of dollars, the crypto industry seems to be ushering in an unprecedented wave of mainstream adoption. Yet beneath this surface prosperity, a hidden and brutal reality is emerging: the core business logic of these highly sought-after phenomenon products actually has almost no substantive relationship with blockchain.

100y sharply dissects the "pipeline dilemma" currently facing the crypto ecosystem. Whether it's compliance-driven prediction markets with centralized matching and clearing, or RWAs and stablecoins relying on traditional financial backends, blockchain merely serves as the underlying financial pipeline for fund deposits and asset transfers. More critically, according to historical patterns of technological diffusion and value accumulation, commercial value is being entirely intercepted by distribution platforms that control end-user relationships, while the underlying on-chain infrastructure and token economics fail to capture genuine value recirculation.

This article not only systematically outlines the architectural differences and similarities between Kalshi and Polymarket, and the bifurcation landscape of on-chain tracks in 2026, but also directly explores the ultimate path forward for the crypto industry. When "the next-generation financial pipeline" is insufficient to sustain the industry's vision, what kind of native applications do we actually need to redefine blockchain's irreplaceable true value?

This article records some of my recent scattered thoughts on the blockchain industry. It builds upon the logical foundation of my previous article, "Why All Current Crypto Businesses Look Identical."

Fig: Kalshi Approved by US CFTC to Launch Single-Stock Perpetual Contract Trading (Source: Kalshi Official Website)

Today brings major news for the crypto industry. The US Commodity Futures Trading Commission (CFTC) announced that it will allow trading in single-stock perpetual futures (i.e., equity perpetual contracts).

This is more than just a regulatory policy announcement. The compliant exchange Kalshi effectively launched real-time trading functionality for equity perpetual contracts on the very same day.

But hold on a second. Is this really a crypto industry news story?

Understanding Kalshi: The Misread "Crypto Native"

As is widely known, Kalshi is a US CFTC-regulated centralized derivatives exchange offering prediction market and perpetual contract trading services.

People often 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 minimal.

Kalshi does not use blockchain technology to power 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.

Kalshi's actual linkage with blockchain is quite limited. Users can deposit and withdraw via stablecoins, and their prediction market positions can be tokenized and seamlessly accessed through Solana-based platforms like 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 provided prediction markets to users outside the US, it did indeed use the Polygon network and UMA oracle as underlying components to adjudicate market outcomes and settle trades.

This created a deep-seated public stereotype that prediction markets are inherently a core component of the blockchain industry. Yet even Polymarket's US version, which operates prediction markets under CFTC regulation, shares almost no technical affiliation with blockchain itself, much like Kalshi.

Second, John Wang joined Kalshi. In August 2025, John Wang officially took office as Kalshi's Head of Crypto Business. Prior to this, he was a researcher at the top-tier crypto venture capital firm Paradigm.

Finally, the launch of perpetual futures contracts. Perpetual contracts are another financial primitive that people often subconsciously assume is naturally tied to blockchain, following a cognitive path identical to prediction markets. This association is not entirely without reason.

Perpetual contracts were originally born as a novel trading tool within cryptocurrency exchanges. The 24/7 continuous trading nature of crypto assets made them the natural breeding ground for the perpetual contract mechanism.

We now possess exceptional pure-blockchain decentralized perpetual exchanges like Hyperliquid and Lighter. Therefore, perpetual contracts indeed have deep roots in the crypto world.

However, from a purely technical architecture perspective, providing perpetual contracts does not require blockchain whatsoever. US compliant exchanges like Kalshi and Coinbase, under strict regulation, utilize zero blockchain technology when executing or clearing their perpetual contract trades.

The bottom line is remarkably clear: prediction markets and perpetual futures are trading products with deep historical ties to the crypto industry, but fundamentally, neither requires blockchain for their underlying operations.

Blockchain Is Being Reduced to a Pure Financial Underlying Pipeline

Fig: The 2026 On-Chain Bifurcation Landscape and the Pipelining Evolution of Financial Infrastructure

In my previous article, I argued that the on-chain ecosystem is becoming increasingly polarized. Looking at the performance of all major tracks across 2026, the entire industry landscape has become extremely clear.

On-chain native tracks like native DeFi are performing poorly. Meanwhile, tracks achieving meaningful growth are almost entirely 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 tightly connected to traditional finance, including stablecoins, Real World Assets (RWAs), and on-chain Vaults.

Given that 2026 is one of the most challenging years in crypto history, the fact that these tracks still achieve significant growth indicates they have, to some extent, found genuine Product-Market Fit (PMF).

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

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

The same applies to Meme coins. Blockchain allows anyone to freely issue tokens and trade them publicly at an extremely low cost; its true core utility essentially lies here.

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

It needs to be clarified that I am by no means dismissing the immense value of financial pipelines. Quite the opposite, this value is obvious.

A global financial backend that allows anyone to trade and access a wide range of assets anytime, 24/7, represents a massive leap compared to traditional financial infrastructure. Merely possessing this capability alone constitutes a core differentiated advantage.

But here is a fascinating phenomenon that catches my attention: among tracks where blockchain truly finds PMF, blockchain itself is almost never the core pillar of the business model. The core pillar is usually something else.

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

Value Concentrates at the Distribution Layer: Where Should the Blockchain Industry Go?

Fig: Comparative Value Capture Curves for Technological Origins vs. Distribution Channels (Source: The COMMANDING HEIGHTS)

A recently published article titled "The COMMANDING HEIGHTS" sparked tremendous interest in the San Francisco VC circle, proposing a profoundly insightful argument.

Historically, commercial value does not necessarily accumulate where a technology is first invented. Value tends instead to heavily concentrate where those who control the distribution channels for that technology reside. The article argues that the AI industry will follow the exact same evolutionary trajectory.

I believe this phenomenon has already undeniably played out in the crypto world. Blockchain has indeed found PMF, but the problem is that the value created has not flowed back to the on-chain ecosystem, nor has it returned to the underlying crypto infrastructure.

The vast majority of commercial value is being captured by front-end distribution platforms that directly hold user relationships. For these platforms, blockchain is not the core business logic at all; it is merely another standard feature within their product tech stack.

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

We need native businesses that are "truly irreplaceable without blockchain." In these businesses, blockchain should not merely be a supporting tool, but must sit at the absolute center of its core business logic.

Of course, we have been down this narrative before. Many once ambitious projects started with such aspirations, attempting to build disruptive products that could only exist on-chain and differ radically from everything prior.

However, most of those projects have long since faded into obscurity. Even so, I still believe we must persist in exploring vigorously along this path.

If blockchain's utility remains confined to serving merely as the "next-generation financial pipeline," then amidst the mega-trend of hyper-financialization, the blockchain industry will most likely eventually devolve into just another provider of mediocre financial infrastructure.

Fair to say, this isn't a terrible outcome. But if we hope the blockchain ecosystem can grow into something vastly larger and more magnificent than it is today, we must provide a more compelling answer.

Perhaps a completely unforeseen new category of native applications will eventually emerge to crack this problem; or alternatively, the catalyst for breakthrough may not come from technology itself, but rather from political or socio-economic shifts that fundamentally reshape mass perception of blockchain, thereby bringing existing native applications back into the spotlight.

I do not know which road the future will ultimately take, but I firmly believe this is precisely the focal point that each of us should watch most closely right now.