1/
The core asset of Cosmos, $ATOM, plummeted by 90%, while projects like Osmosis, JUNO, and INJ saw declines of up to 70% to 99%.
From Celestia to Osmosis, the cycle of 'airdrop → speculation → dump → death' continues to repeat, short-term speculation driving out long-term builders, consuming trust and capital.
The once vision of 'blockchain internet' has now fallen into the death spiral of the airdrop economy.
2/
The collapse of Cosmos is not accidental, but a reflection of a Web3 'pseudo-business model': issue tokens → airdrop → pump → attract traffic → sell off → collapse
This is not a business logic, but an incentive loop.
Short-term effectiveness, long-term collapse.
3/
Our common 'false logic':
Airdrop ≠ User growth
TVL ≠ Retention rate
Price ≠ Revenue closed loop
Web3 is not incapable of profitability, but most projects have never seriously considered their own economic models and business models. x.com/polkaworld_pro…
4/
The structural dilemma of Cosmos is:
• Subchains operate independently, making it difficult to retain value (this issue also appears in Ethereum L2 and Polkadot)
• ATOM has no actual demand, high inflation is difficult to hedge, and it dilutes the value for holders. Previously, airdrops could compensate, but airdrops will ultimately be a beautiful bubble.
• Governance division, community trust eroded
• Airdrop economy, expelling builders
• No user value closed loop
5/
The bigger crisis is that this phenomenon is not unique to Cosmos.
Most L1/L2 face the same problems:
✅ Strong technology
❌ Weak users
✅ Multiple narratives
❌ Missing revenue model
Web3 is not incapable of running a closed loop, but most projects only want to run a speculation mechanism.
6/
So what is the real business logic?
✔️ Solving real problems for users
✔️ Users are willing to pay for services
✔️ Projects generate income
✔️ Reinvesting to optimize products
✔️ Ultimately forming a positive cycle
Simple, yet rare.
7/
Of course, I am not saying that @Polkadot has escaped this exception.
But at least, Polkadot has never considered the 'airdrop economy' (which is both a good and a bad thing)
It does not speculate on narratives or TVL, but has been tackling underlying technology, and starting in 2024, it is shifting towards product thinking, continuously lowering the threshold for developers and improving user experience.
8/
Currently, in Polkadot, the problems everyone is aware of and what we are doing are:
1. On the supply side, we are fixing the total amount of DOT and reducing inflation (currently under off-chain voting x.com/polkaworld_pro…)
2. Considering the demand side of DOT: besides the sale of core Coretime; Parity is accelerating the launch of Polkadot Hub, using DOT as the main transaction fee, enhancing the usage scenarios of DOT; furthermore, Polkadot defi is also making strides!
3. Recognizing the high security costs brought by the staking mechanism, exploring ways to reduce security costs from $500 million to $90 million through PoP. Even lower by offsetting with selling Core (of course, this is a longer-term plan).
4. Launched the JAM protocol, which will replace the current relay chain in the future, making it easier for developers to deploy and providing a more powerful computing platform, while also exploring ways to reduce core usage costs and lower the economic costs and usage barriers for developers.
5. Additionally, on the product side, I think it's worth mentioning Polkadot APP, which includes Polkadot Pay and the Polkadot VISA card as a use case for DOT.
9/
In summary, we see that Polkadot is indeed rebuilding the logical closed loop of 'infrastructure as business':
• DOT: The unit of utilizing computing resources
• JAM: Creating a decentralized Web3 cloud, a more powerful computing platform
• Coretime: Rentable computing resources market
• Elastic scalability: chains can scale with business load
• One-click deployment: one-stop launch Rollup/Appchain (via @PolkadotDeploy
• Polkadot Hub: A condensed version of Polkadot, capturing Polkadot's technical capabilities onto the DOT token
• PoP: Replacing PoS, reducing the total cost of the network, and enhancing the democratic nature of network governance
• Reduce DOT inflation: control total supply, reduce issuance, protect the interests of holders
10/
This means that the main economic model is:
DOT → Rent Coretime → Start service → Generate income → Expand resources → More DOT → Form growth closed loop
Not relying on airdrops, but on usage.
This should be the real economic model that Web3 has.
11/
The dilemma of Cosmos is a mirror warning for Web3.
Polkadot is not without challenges, but it is emerging from:
Speculation narratives → Infrastructure construction → Transition to real economy