Conflux’s CFX Rallies on China Optimism, But On-Chain Data Raises Red Flags

Conflux’s CFX token posted a strong weekend rally, jumping 14% and outperforming the broader CoinDesk 20 Index, which climbed 4%. The surge comes amid renewed enthusiasm surrounding the project’s ties to China and speculation that Beijing may be softening its stance toward select digital assets.

Despite the bullish headlines, however, on-chain metrics tell a more tempered story.

Conflux has long positioned itself as “China’s Ethereum”—a regulatory-friendly blockchain network with the unique ability to operate both within the mainland (as a compliant ledger without a token) and in global crypto markets (via the CFX token). The protocol has forged partnerships with Chinese tech companies, including social media platforms akin to Instagram, further fueling optimism among retail and institutional traders.

Insiders suggest that China is showing interest in stablecoins as part of a broader strategy to counter U.S. dollar dominance, particularly in offshore trade. Conflux’s plans to launch a stablecoin tied to the offshore yuan (CNH) have added fuel to the rally. Over the past 30 days, CFX has surged more than 190%, drawing attention from traders hoping to ride the so-called “China trade.”

Still, the excitement hasn’t translated to a meaningful uptick in usage.

According to network explorers, daily transaction volumes on Conflux remain well below their 2022 levels, with only intermittent spikes in activity. More troubling is the level of centralization: roughly 80% of gas fees on the network are generated by just three accounts. By contrast, Ethereum’s top gas spender accounts for less than 10% of the total, reflecting broader network participation.

The broader “China narrative” remains compelling. Rumors of an outright crypto ban on the mainland are unfounded, and Hong Kong’s embrace of digital assets continues to serve as a regulatory sandbox—much like its role in pioneering stock market reform for the mainland in the 1990s.

But whether Conflux is the best vehicle for this narrative remains an open question. While the token price reflects growing investor optimism, current on-chain activity does not offer the same validation.