Former Binance CEO Changpeng “CZ” Zhao has urged crypto builders to prioritize developing decentralized applications (dApps) rather than focusing on launching new blockchain networks. His remarks come in response to declining performance among several newly launched chains.
CZ’s Call for dApps Over Chains
In a recent post, CZ wrote, “Need more dapps instead of chains,” reacting to data shared by Messari researcher @defi_monk that highlights the struggles of newly launched blockchains.
The research indicates that many new chains experience sharp declines after their Token Generation Events (TGEs). According to Messari’s data:
- Starknet (STRK) and Dymension (DYM) have seen cumulative returns drop by 87%.
- Blast (BLAST) has fallen by 85%, while Mode dropped by 70%.
- Even prominent projects like Berachain (BERA) and Scroll (SCR) have faced steep declines of 59% and 50%, respectively.
However, the exception to this trend is Hyperliquid (HYPE), which has surged 1,100% since its TGE.
Saturation of the Crypto Market
The Messari researcher further noted that the market has witnessed $10 billion in long position liquidations, with an additional $17 billion worth of token unlocks entering circulation by the end of April. This suggests an oversaturation of Layer 1 and Layer 2 blockchain networks, leading to diminished market absorption capacity.
“The market can no longer absorb execution environments that add no value,” the researcher stated, emphasizing the growing need for meaningful development rather than redundant chains.
Community Reaction and Industry Perspective
CZ’s statement quickly gained traction, with many crypto users agreeing that the industry has too many chains. Many believe that the focus should be on enhancing decentralization and expanding dApp ecosystems to drive genuine innovation.
As previously reported by crypto.news, Berachain recently conducted one of the largest airdrops of 2024 alongside its much-anticipated mainnet launch. However, the token’s price plummeted by 63%, largely due to insiders dumping tokens post-launch.
The Future of dApps and Blockchain Development
CZ’s comments reinforce the growing sentiment that new blockchain networks must offer real value to survive in an increasingly competitive and saturated market. With investor confidence wavering in underperforming blockchains, the shift towards dApp innovation could define the next phase of crypto industry growth.
