Conflux’s CFX Surges on China Optimism, But On-Chain Activity Remains Weak
Conflux’s CFX token rallied about 14% over the weekend, outperforming the broader crypto market’s modest gains. The surge has been driven by growing speculation that China may be softening its stance on certain digital assets, positioning Conflux as a potential beneficiary.
Conflux promotes itself as “China’s Ethereum,” offering a regulatory-compliant blockchain within mainland China while maintaining a global presence through its CFX token. Analysts describe it as operating under a “one country, two systems” model, partnering with major Chinese tech firms, including local social media platforms.
Investor enthusiasm has also been fueled by Conflux’s plans to launch an offshore yuan-backed stablecoin, amid reports Beijing may favor stablecoins to reduce dependence on the U.S. dollar. Over the past month, CFX has soared more than 190%.
However, the network’s underlying on-chain metrics paint a more cautious picture. Transaction activity has remained stagnant for the past year, with daily volumes even lower than 2022 averages. Data reveals that nearly 80% of gas fees come from just three addresses, suggesting a concerning level of centralization. By comparison, Ethereum’s top gas spender accounts for under 10% of total fees.
While rumors of an outright crypto ban in mainland China are unfounded and Hong Kong continues to embrace crypto innovation, it remains uncertain whether Conflux truly reflects China’s evolving crypto landscape. Despite the recent price rally, the on-chain data indicates fundamentals have yet to align with market optimism.
