Does Anyone Really Need Blockchain? Reflections Triggered by Kalshi

The underlying operations of prediction markets and perpetual futures do not require blockchain.

Written by: 100y

Compiled by: Chopper, Foresight News

The crypto industry received a significant piece of news today: the U.S. Commodity Futures Trading Commission (CFTC) has approved trading in stock perpetual contracts. This is not just a regulatory announcement; Kalshi launched the live trading of this product on the same day it was officially announced.

But there is a question: is this really crypto industry news?

Understanding Kalshi

As most people know, Kalshi is a centralized derivatives exchange regulated by the U.S. CFTC, focusing on prediction markets and perpetual futures. It is commonly believed that Kalshi is deeply tied to the blockchain industry, but the reality is that the connection between Kalshi and blockchain is quite limited.

Kalshi's core products, including prediction markets and perpetual futures, do not rely on blockchain for their operation. Orders are matched off-chain through a self-developed matching engine, and clearing and settlement are handled by its CFTC-regulated clearinghouse, Kalshi Klear.

The only intersection between Kalshi and blockchain is that users can deposit and withdraw funds using stablecoins, and its prediction market positions can be tokenized, accessed via the Solana ecosystem platforms DFlow and Jupiter.

So why do people instinctively associate Kalshi with blockchain? I believe there are several reasons:

• Benchmarking Polymarket: When Polymarket initially launched its prediction markets for users outside the U.S., it relied on the Polygon network and UMA oracles for result determination and trade settlement, leading the market to form an inherent impression that prediction markets are products of the blockchain space. Even Polymarket US, which is regulated by the CFTC and targets the U.S. market, has a low reliance on blockchain, similar to Kalshi.
• John Wang's Joining Kalshi: In August 2025, John Wang joined Kalshi as the head of crypto business; he was previously a researcher at Paradigm, a leading crypto venture capital firm.
• Perpetual Futures Products: Perpetual futures are another type of financial native product that is commonly assumed to be tied to blockchain. This association is not unfounded, as perpetual contracts originated in crypto exchanges, and the 24/7 trading nature of the crypto market naturally fits perpetual contracts. Moreover, there are native on-chain perpetual contract platforms like Hyperliquid and Lighter_xyz. While perpetual contracts are indeed rooted in the crypto market, from a technical perspective, conducting perpetual futures business does not necessarily require blockchain. U.S. licensed exchanges like Kalshi and Coinbase execute and clear perpetual contract trades without using blockchain.

The conclusion is simple: prediction markets and perpetual futures are trading categories deeply tied to the crypto industry, but their operations do not require blockchain.

Blockchain, Just a Financial Channel

In my previous article, I mentioned that the on-chain ecosystem is heading towards polarization.

Looking back at the performance of various sectors in 2026, the trend is very clear. Native on-chain sectors like DeFi performed poorly, while sectors that achieved significant growth were basically divided into two ends.

One end is speculative sectors: prediction markets, perpetual futures, MEME coins; the other end connects traditional finance: stablecoins, real-world asset tokenization (RWA), treasury funds.

2026 was itself a year of poor performance for the crypto industry, yet these sectors still achieved substantial growth, indicating that they have at least found a certain degree of product-market fit.

At first glance, these two types of sectors seem vastly different, but they share a common point: most merely treat blockchain as a financial transmission channel.

As mentioned earlier, the underlying operations of prediction markets and perpetual futures do not require blockchain. The role of blockchain is concentrated in the areas of deposits and withdrawals, asset tokenization, and free trading. MEME coins are similar: blockchain allows anyone to issue tokens and trade freely, which is almost their entire value.

On the other hand, stablecoins and RWAs also primarily use blockchain as a new generation of financial channel to replace the outdated backend infrastructure in traditional finance.

Of course, I am not saying that financial channels lack value; on the contrary, a system that allows anyone to trade around the clock and access various assets is a significant upgrade compared to traditional financial infrastructure. Just this point alone has already formed a differentiated advantage.

However, I think it is worth pondering that in those sectors where blockchain has truly found product-market fit, blockchain itself is rarely the core of the business. The core logic lies elsewhere; the real commercial essence has another carrier, and blockchain merely makes the business more efficient, faster, and lowers the threshold.

The Future of the Blockchain Industry

A recent article circulating in San Francisco proposed an interesting viewpoint: in the long run, value may not necessarily settle where the technology was born, but rather in the stages of technology distribution and implementation. The article suggests that the AI industry will follow this pattern.

In my view, this pattern has already played out in the crypto industry. Blockchain has found its product-market fit, but the value has not flowed back to the on-chain ecosystem itself or to the underlying public chain infrastructure. The vast majority of value has been taken by platforms that hold user relationships. For these platforms, blockchain is not the core logic of the business; it is just one capability in the product feature set.

So what should the blockchain industry do next? Currently, blockchain has proven to be viable as a financial channel and has established product-market fit. But I believe we cannot stop here; we need more such businesses: where blockchain is an irreplaceable infrastructure, not just an auxiliary tool, but rooted in the core logic of the business.

Of course, we have seen countless similar attempts. Many projects initially harbored this goal: to create products that can only run on blockchain and are fundamentally different from all past things. However, the vast majority of these projects have not survived to this day. Even so, we must continue to explore in this direction.

If the role of blockchain is forever limited to being a new generation of financial channel, then in a highly financialized era, the blockchain industry may ultimately become just one of many financial infrastructure providers. Objectively speaking, this outcome may not be a bad thing. But if we hope for the blockchain ecosystem to grow into something far beyond the current landscape, we must find new answers.

Perhaps in the future, a completely new type of native on-chain application will emerge, unlocking this dilemma. Perhaps the catalyst for breaking the deadlock is not technology at all, but political and social changes that fundamentally alter the public's perception of blockchain, allowing existing applications to regain attention.

I do not know which path will become reality. But this is precisely the direction we should continue to observe.

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