Conflux’s CFX token has captured the spotlight over the weekend, posting a robust 14% surge and outpacing the broader CoinDesk 20 index, which recorded a more modest 4% increase. This impressive rally, however, belies a more complex reality lurking beneath the surface—one that raises eyebrows among seasoned market observers.
A Tale of Two Systems
Conflux has long been touted as “China’s Ethereum,” offering a unique “one country, two systems” protocol that deftly navigates the regulatory labyrinth of mainland China. Unlike most cryptocurrencies, Conflux provides a compliant digital ledger sans a token within China, while simultaneously engaging with global crypto markets through its tokenized operations. This dual role has made it a darling among those who see potential in China’s cautious flirtation with blockchain technology. As explored in our recent coverage of Hong Kong’s OSL’s efforts to bring ‘trusted access’ to crypto, the region’s regulatory environment continues to evolve, influencing market dynamics.
According to insiders, Beijing appears increasingly open to stablecoins as a counterbalance to U.S. dollar dominance. Conflux, sensing an opportunity, is developing an offshore-yuan stablecoin—a move that has understandably fueled market excitement. The token’s remarkable 190% climb over the last month is a testament to this optimism.
The On-Chain Reality Check
Yet, despite the buzz, the on-chain activity tells a different story. A close examination of data from network block explorers reveals that Conflux’s transactional activity has remained stagnant over the past year, even falling short of 2022’s daily averages. Occasional spikes notwithstanding, the overall picture suggests a lack of organic growth—a critical metric for assessing a blockchain’s health.
Moreover, the concentration of gas spending on the network is cause for concern. Nearly 80% of the total gas expenditure emanates from just three accounts, pointing to a worrisome level of centralization. In stark contrast, Ethereum, a network often held as the gold standard, sees its largest gas spender accounting for less than 10% of total gas usage. This disparity raises questions about Conflux’s decentralization—a core tenet of blockchain philosophy.
The China Narrative: Hype or Hope?
The broader China narrative is undeniably gaining traction. Contrary to rumors of an outright crypto ban, the mainland continues to explore blockchain’s potential, taking cues from Hong Kong’s more liberal approach. This mirrors historical trends, where Shanghai’s equity market development drew lessons from its counterpart in the city before China opened its stock markets in the 1990s. For a deeper dive into the regulatory implications, see our coverage of JPMorgan CEO’s evolving stance on stablecoins and blockchain.
However, whether Conflux is the best vehicle for capitalizing on this narrative remains up for debate. The token’s recent rally, while impressive, may not be fully supported by the underlying fundamentals. “While the hype is there, the on-chain data is not,” cautions a crypto analyst familiar with the situation, highlighting the disconnect between market perception and reality.
As we forge ahead into the latter half of 2025, the spotlight on Conflux will likely intensify. Investors and analysts alike will be watching closely to see if the network can translate its current momentum into sustained, organic growth. The stakes are high—and the questions, many. Will Conflux rise to the occasion, or will it falter under the weight of its own ambitions? Only time will tell.
Source
This article is based on: Conflux’s CFX Rallies on China Buzz, but Analysts Believe Fundamentals Still Lag
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
