2026: The Year of Polarization in Virtual Assets

An image depicting the extreme trends in the on-chain ecosystem in 2026. Source=Populus

The blockchain industry has long been a massive testing ground for new business models. Numerous models have emerged that are hard to find in traditional internet and finance, including Decentralized Autonomous Organizations (DAOs), Non-Fungible Tokens (NFTs), Play-to-Earn (P2E) games, the metaverse, decentralized social media, algorithmic stablecoins, restaking, Bitcoin Layer 2 (L2), and modular blockchains.

However, most have failed to create sustainable demand. NFT trading volumes have significantly decreased compared to their peak, and many P2E and metaverse projects have struggled to retain users. In the Bitcoin L2 and modular blockchain sectors, projects that once received large investments have either scaled back their operations or pivoted to other areas. Despite a massive influx of funds into restaking, the actual demand for its utilization has not grown as expected, leading major projects to seek new business models.

In 2026, these changes have become even more pronounced. In the past, when market interest waned, it was common for projects to maintain services with existing funds, but recently, there have been increasing instances of projects actually shutting down services or completely pivoting to different businesses. Many in the crypto industry are now at a stage where they must accept the results of their long experiments.

That said, the entire on-chain market is not in decline. In fact, some areas are growing rapidly, regardless of the market downturn. The problem is that the areas of growth have become extremely narrow.

Currently, the on-chain market is largely divided into two directions. On one side are services that absorb strong speculative demand, such as meme coins, perpetual futures, and prediction markets, while on the other side are services connected to the real economy, such as stablecoins, real-world assets (RWAs), and vaults. In contrast, general on-chain applications positioned in between are relatively stagnant.

One reason for this is the change in risk versus expected returns. In the past, simply depositing stablecoins in DeFi could yield high returns, but as the market has matured, such opportunities have diminished. Additionally, investors now have to bear the risks of smart contract hacks and protocol failures. From an investor's perspective, if they can achieve similar returns, it has become more natural to choose RWAs that bring yields from real assets like government bonds, or if they are willing to take risks, to opt for meme coins or leveraged trading with much higher potential returns.

In fact, strong demand is still evident in speculative areas. Meme coins continue to emerge in new forms through multiple market cycles, and recently, the increase in trading services accessible to general users has lowered the entry barriers. The Robinhood chain also attempted to build an ecosystem centered around tokenized stocks, but a significant portion of its trading volume has come from meme coins since its launch.

Prediction markets are also growing rapidly. Trading is expanding in high-demand areas such as sports, politics, and crypto, attracting users who were not previously on-chain. Perpetual futures are also maintaining relatively solid demand compared to spot trading, with the trading targets expanding from digital assets to stocks and commodities.

On the opposite side, "boring" businesses are growing.
Source=Populus

Prominent examples include stablecoins and RWAs. Stablecoins are expanding their use beyond merely serving as a payment method for digital asset trading to include real economic activities such as card payments and remittances. RWAs are also expanding their tokenization targets beyond government bonds and money market funds (MMFs) to include private credit and stocks. Their growth differs from past crypto businesses in that they are moving the asset and payment demands of existing financial markets on-chain rather than relying on the rise in digital asset prices.

This polarization is also changing corporate strategies. Recently, companies that started in completely different areas, such as Coinbase, Robinhood, MetaMask, and Klaytn, have begun to offer increasingly similar services. They are launching perpetual futures, adding prediction markets, supporting meme coins, and introducing stablecoins and RWAs.
Source=Populus

It's not that companies are lacking ideas. After years of experimentation, they are gradually identifying what businesses can generate revenue regardless of market conditions and have actual users.

Ultimately, the crypto industry is moving from an era of experimentation where "anything can be made on blockchain" to a stage where it questions "what can be made on blockchain that people will actually use."

The fact that many experiments have disappeared should not be viewed solely as a failure of the industry. Markets that efficiently handle speculative demand, like meme coins, prediction markets, and perpetual futures, and those that solve real economic problems, like stablecoins and RWAs, are finding their own product-market fit (PMF).

This is also why crypto businesses are becoming increasingly similar. After testing numerous possibilities, the surviving markets are narrowing down to a few. The industry may appear less novel and glamorous than before, but paradoxically, this could signal that it is becoming clearer what blockchain can actually be used for.

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