Zombie Chains Reach Half, Public Chains Left with Only Survival Battles

Author: Bitpush

A blockchain company backed by a16z, which raised $140 million, has ultimately decided to shut down its own public chain and migrate to a competitor's network.

This reflects a change happening in the blockchain industry in recent years: once everyone was eager to create chains, now some projects are actively withdrawing. Meanwhile, trading volume and capital are increasingly concentrated in a few leading ecosystems, and the survival space for new public chains seems to be shrinking.

Story Decides to Shut Down Its Own Chain

Yesterday, DATA, formerly known as Story Protocol, announced it would gradually shut down its Layer 1 blockchain and move its operations to Sui after receiving a $30 million investment from the Sui Foundation.

Story was once a star project in the field of intellectual property on the blockchain, raising a total of $140 million with the goal of bringing music copyrights, patents, trademarks, and other assets onto the blockchain for automatic licensing and trading.

However, reality is far more complex than imagined. The traditional intellectual property industry already has a mature licensing system, and large copyright holders lack the motivation to change the existing model. DATA's CEO Andrea Muttoni admitted that the company was trying to solve too many problems at once.

In June of this year, Story rebranded to DATA, shifting its focus to the AI training data market. Its core product, Trace, is responsible for recording data sources, licensing, and usage rights. As of October, the company claims to have registered over 250 million data contribution records. As the business focused, the company realized: since the real product is a data verification tool, why spend so many resources maintaining its own blockchain?

Thus, DATA chose to utilize Sui's computing and storage infrastructure to concentrate resources on product development. The migration is not yet complete, and the original chain will continue to operate during the transition.

Therefore, owning a public chain no longer inherently means having a competitive advantage.

Increasing Number of Abandoned Projects

Similar stories have been unfolding in recent years.

In April 2023, the decentralized wireless network Helium abandoned its own L1 and migrated to Solana, refocusing on wireless network construction.

In March 2025, Celo, which focuses on mobile payments, transitioned from an independent L1 to Ethereum L2, leveraging Ethereum's security and developer ecosystem for continued development.

By 2026, the reshuffling will become even more apparent.

The established blockchain project Lisk announced in August that it would shut down its L2 on October 31, transforming into a financial management platform for enterprises. Polygon also halted block production on the Polygon zkEVM network on July 3. Polygon previously admitted that although the product was technically complex, it had not formed a sufficiently clear market differentiation.

These cases are not entirely the same: Helium and DATA are moving to existing public chains, Celo retains its own L2, Lisk exits the chain infrastructure business, and Polygon is scaling back one of its technical routes.

But the common trend is clear: building blockchain infrastructure is becoming easier, but finding enough users is increasingly difficult.

In the early days, public chains could attract capital and developers with faster speeds and lower fees. Now, with Ethereum L2 and modular technology maturing, technical performance is no longer a scarce resource. What is truly scarce are users, capital, applications, and sustained revenue.

Sixty Percent Zombies, Survival Battles

According to the latest data, the differentiation in the public chain market is no longer just a "clear head effect" but a two-tier structure with a significant gap.

First, looking at trading activity, according to DefiLlama data as of October 21, 2026, the top five decentralized exchange (DEX) spot trading volumes over the past seven days are:

• Solana: Approximately $14.3 billion
• Ethereum: Approximately $8 billion
• BNB Chain: Approximately $7 billion
• Base: Approximately $6.6 billion
• Robinhood Chain: Approximately $6.6 billion

Solana continues to lead in on-chain spot trading, with Ethereum and BNB Chain maintaining strong positions, while Base and Robinhood Chain have entered the first tier.

In terms of Total Value Locked (TVL), which measures DeFi capital scale, Ethereum has about $51.1 billion, far exceeding Base's $6.4 billion, Solana's $6 billion, and BNB Chain's $5.8 billion.

Among the 588 public chains recorded by DeFiLlama, the number of public chains with a total locked value (TVL) of less than $1 million has reached an astonishing 343, accounting for 58.33% of the total number of public chains worldwide. This means that nearly sixty percent of public chains are in a state of "technical death" or have no capital utilization.

The concentration in the stablecoin market is even higher. DefiLlama data shows that the total scale of global stablecoins is approximately $301.2 billion, with Ethereum accounting for about $143.6 billion and Tron about $94.7 billion, together accounting for approximately 79%.

Different sectors are forming their own advantageous networks: Solana excels in high-frequency spot trading, Ethereum gathers a large amount of DeFi capital, Tron has a vast USDT ecosystem, and Hyperliquid stands out in the perpetual contract field, with its on-chain perpetual contract trading volume reaching approximately $58.1 billion over the past seven days.

Emerging real-world asset tokenization (RWA) is also on the rise. DefiLlama's RWA statistics show that the current on-chain RWA asset management scale is approximately $34.9 billion, with about $4.3 billion entering DeFi applications.

However, high trading volume does not necessarily indicate sustainable demand.

The Robinhood Chain, launched in July this year, is an example. It was originally aimed at RWA assets such as stocks, but CoinGecko data shows that 79.2% of its DEX trading volume in July came from meme coins.

After the meme speculation frenzy cooled down, the average daily trading volume from October 2 to 8 decreased by 42% compared to mid-September, and the number of active addresses dropped by 31%.

A chain can quickly gain traffic through memes, but it cannot rely solely on memes to prove long-term value.

Is There Still Hope for New Public Chains?

From the current landscape, it is already very difficult for a new general-purpose public chain to challenge Ethereum or Solana simply by relying on "faster speeds and lower fees."

Leading ecosystems have established clear network effects: where users are, developers are more willing to go; where capital is, new financial applications are easier to grow. These advantages will not easily disappear just because another chain has better technical metrics.

However, this does not mean that newcomers have no opportunities.

Base is backed by Coinbase's users and channels, Robinhood Chain has a customer base from traditional brokerages, and Hyperliquid is establishing its market through perpetual contract trading products. These newcomers are not simply relying on technology to attract users but are entering the competition with clear products or traffic entrances.

Future opportunities are more likely to arise in specific scenarios such as stablecoin payments, RWA, on-chain derivatives, and AI data verification, rather than recreating a general-purpose public chain that can do everything. DATA's migration to Sui is an example: for it, creating AI data products is more important than maintaining a chain; for Sui, hosting a project with real business is also more valuable than just processing a few transactions. To assess the value of a public chain, trading volume, address count, and financing amounts are no longer sufficient; one must look at real users, sustained capital inflows, application revenues, and what remains after subsidies fade. The industry does not need more new chains; it needs products that users cannot live without.