The Double-Edged Sword of Consumption Chain Projects: Innovation and Risk Coexist

In recent years, many 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 user thresholds. In this wave, a certain consumer Layer project has quickly attracted the attention of millions of users with its EVM compatibility and the tokenization of social platform points.

However, as the project progresses, market feedback shows a polarized trend: on one hand, the project's technological innovations 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 use this as an example to explore the essence of the consumption chain: is it a pioneer of industry transformation, or a tool for shell switching and harvesting profits?

1. Innovation and Achievements of the Consumption Chain Project

Technical Breakthrough: EVM Compatibility and Social Ecosystem Integration

The biggest highlight of this project is its EVM compatibility, which allows developers to build applications in a specific ecosystem using the familiar Solidity language, greatly reducing the development threshold. At the same time, through the tokenization of social platform points, it transforms Web2 users' points into on-chain assets, further simplifying the user entry process into Web3. This technological integration not only brings new liquidity to the target ecosystem but also provides seamless on-chain experiences for hundreds of millions of social platform users.

User Growth and Ecosystem Expansion

Since the launch of the testnet, the project has attracted over 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 transactions. After the mainnet launch, the number of active wallets quickly exceeded 1 million, and the on-chain transaction volume exceeded 5 million transactions, demonstrating a strong user growth momentum. In addition, the project has also partnered with several well-known blockchain platforms, further expanding its ecosystem.

Tokenomics and Incentive Mechanisms

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

II. Behind User Losses: Hidden Concerns of the Consumption Chain

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

Although the project attracted a large number of users through airdrops and staking activities, some users reported that the rules of the activities were complex and the participation costs were relatively high. For example, users need to stake a certain amount of assets to receive airdrop rewards, and in cases of significant market volatility, the value of the staked assets may plummet, resulting in the actual earnings for users being lower than expected. This design has been questioned by some users as being a "disguised way to exploit investors."

The limitations of social credit tokenization ###

The tokenization of social points in the project, while lowering the barriers 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 widespread consumption scenarios. This limitation may lead users to question the long-term value of the project.

Insufficient ecological liquidity

Although the project is committed to integrating liquidity from multiple blockchain ecosystems, the DeFi protocols and applications within its ecosystem are still in the early stages, and liquidity is relatively insufficient. This problem of fragmented liquidity may limit the actual experience of users and, in turn, affect the long-term development of the project.

3. The Essence of the Consumption Chain: Industry Transformation or Shell Change for Profit?

The potential for industry transformation

The core goal of the consumption chain is to lower the user threshold through technological innovation, promoting the migration of Web2 users to Web3. The project's EVM compatibility and social points tokenization features reflect this concept. This compatibility not only allows for a smooth transition of existing Web2 applications to the Web3 ecosystem but also provides developers with more powerful tool support, enhancing user experience and application adoption rates. If it can effectively address 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, driving the comprehensive development of the decentralized economy.

The risk of being harvested

However, the incentive mechanisms and business models behind the consumption chain are also easily abused. Some projects may attract user funds through complex participation rules and high participation costs, ultimately resulting in losses for investors. This phenomenon of "cutting leeks"—luring with high returns at the expense of user funds—is not new in the blockchain field, especially in the absence of effective regulation, which may exacerbate irrational speculative behavior 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 are key challenges for its future development.

IV. Case Insights of Consumption Chain Projects: Predicaments and Solutions

The double-edged sword of token economics design

The token economic model of this project is at the core of its controversy. Although it allocates 77% of the tokens to the community (including 50% airdrop, 20% ecological development, etc.), attempting to attract user participation through high incentives, historical data shows that over 88% of the tokens devalued significantly within three months after the airdrop due to selling pressure. This model can quickly accumulate users in the short term, but if there is a lack of actual application scenarios to support it, the token value is difficult to maintain, ultimately leading to users suffering losses due to asset depreciation. For example, users in the project's testnet activities charged 9.3 million social points, but the usage scenarios after tokenization were limited to paying for Gas fees and staking, failing to form a consumption closed loop.

The Distinction Between Virtual and Real in Technological Integration

The project's technological innovations—such as EVM compatibility, tokenization of social credits, and cross-chain liquidity integration—are packaged as "industry breakthroughs," but their actual implementation effectiveness still needs to be verified. For example, its claimed "integration of multi-ecosystem liquidity" relies on cross-chain bridges and incentive mechanisms, but the total locked value (TVL) of the target ecosystem is only $700 million (90% being native tokens and stablecoins), indicating a weak underlying support for liquidity integration. Furthermore, although the development threshold has been lowered through specific architectures, the decentralized applications (DApps) in the target ecosystem are still primarily focused on Memes and simple GameFi, lacking complex applications.

Community-driven sustainability challenges

The "fun community culture" of the project is a highlight of its user growth, such as attracting millions of users through gamified interactions designed by robots. However, this model is highly reliant on short-term incentives, raising concerns about user retention. Data shows that while there were 230,000 users who charged social points during the testnet phase, the growth rate of on-chain transaction volume has slowed down after the mainnet launch, indicating that user activity may decline following the end of the airdrop. In contrast, a mature consumption chain needs to build a long-term value capture mechanism, such as transforming user behavior into on-chain productivity through DeFi protocols, rather than relying solely on the "traffic-airdrop" cycle.

5. 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 social points to enable 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, for example, using points for social rewards, content subscriptions, and other high-frequency consumption behaviors, forming a "points-consumption-revenue" closed loop.

Technical Deepening 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 is necessary to explore more fundamental solutions, such as using 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" of the consumption chain needs to face regulatory challenges. For example, social points as a fiat currency entry may involve KYC/AML issues, while 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."

6. Conclusion

The case of the consumption chain project reflects the typical contradictions of this track: on one hand, there is the innovative potential of technology integration and user growth, while on the other, there are the risks of token economic bubbles and short-term profit-seeking. 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 services, the so-called liquidity, and whether cross-chain integration truly enhances capital efficiency rather than remaining on the surface of accounting data, as well as whether its community governance can shift from the short-term interest-driven "haircut party" to active ecological co-builders who participate in long-term value distribution.

If a consumption chain project only uses "lowering the threshold" as a guise for "traffic harvesting", it is bound to 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.