Conflux’s CFX emerged as the standout performer during weekend trading, marking an impressive rise of about 14%, surpassing the broader CoinDesk 20 index which increased by 4%. However, despite its market success, there’s a notable lack of activity on-chain. Conflux claims the title of “China’s Ethereum,” maintaining compliance through a digital ledger that’s accessible in mainland China.

What to know:

• Conflux surged by 14% over the weekend, outperforming the CoinDesk 20’s 4% rise.
• Yet, its on-chain activity is stagnant, with transaction levels significantly reduced compared to 2022 average values.
• Centralization issues loom, as 80% of gas usage is attributed to merely three accounts, in stark contrast to Ethereum’s more decentralized network.

Analysts describe it as a “one country, two systems” protocol because it caters to both global crypto markets and serves as a digital ledger within mainland China, collaborating with local web giants. Insiders suggest Beijing may be favoring stablecoins to challenge the dominance of the U.S. dollar, which aligns with Conflux’s upcoming offshore-yuan stablecoin strategy. Despite the enthusiasm surrounding the token, this optimism isn’t echoed in on-chain performance.

Transaction activity remains disappointingly low when compared to previous years, reflecting an overall trend of stagnation. On-chain analytics indicate that a troubling level of centralization exists, with three accounts dominating gas expenditures, raising red flags among observers who highlight Ethereum’s more diverse gas spenders.

Emerging narratives in China signal a shift in crypto policy, yet the sustainability and reliability of Conflux as a representation of this trend remain questionable.