What drives the price surge of cryptocurrencies with no revenue?

Original Author: @yashhsm
Translation: Peggy, BlockBeats

Original Title: Why Do Some Coins Skyrocket Without Revenue?

Usable Crypto vs. Narrative Crypto

I used to view the crypto world as a whole, but recently my entire perspective has shifted. Now, I always divide the crypto world into two main domains, especially from a builder's perspective: Narrative Crypto and Usable Crypto.

Next, I’ll explain how to understand these two types, and how to build products or make money based on them.

Usable Crypto

These are usually “the best businesses”: wallets (such as @phantom, @MetaMask); stablecoins (such as USDT, USDC); exchanges (such as @HyperliquidX, @Raydium, @JupiterExchange); launch platforms (such as @pumpdotfun); bots and trading terminals (such as @AxiomExchange); DeFi protocols (such as @aave, @kamino, @LidoFinance), and so on.

These products are truly usable and can generate massive revenue.

(Reference: Projects with the highest fee income in the crypto space)

Narrative Crypto

These usually have a grand story or vision (with market caps reaching $100 billions+), enough to change the world: Bitcoin (the narrative of “better money” or “digital gold”); AI x Crypto (most GPU infrastructure and agent frameworks); decentralized science (DeSci) or intellectual property projects (such as Story Protocol); new L1/L2s (for example, stablecoin-driven L1s or perpetual contract L2s); privacy coins (such as @Zcash); restaking and other infrastructure projects; x402.

These projects generate little to no revenue, but due to their strong narratives, they can attract institutions and retail investors, driving token prices up.

The Two Aren’t Mutually Exclusive, But Can Be Complementary

For example:

Zcash’s daily transaction volume is actually quite low (5–10k per day), but its current “privacy” narrative is very strong, thus attracting a lot of attention. This attention can in turn boost its usability (see the recent surge in transaction volume).

Another example: x402 launched by @CoinbaseDev has almost no actual usage, but has recently become a hot topic, and speculative activity brings more attention and usage.

I always see this as a spectrum:

(If your logo is misplaced or missing, feel free to point it out!)

Both are equally important because they reinforce each other:

Narrative Crypto → triggers speculation → drives adoption of Usable Crypto
In Usable Crypto, product (user) is king;
In Narrative Crypto, community is king.

The Builder’s Dilemma:

Every builder faces a question: Should you build a narrative-driven project or a usable project?

A simple rule of thumb:

If you’re good at attracting attention, charismatic enough to start a movement (or you’re “scammy enough”—which is actually a skill, and a compliment!), then you should build a narrative crypto project.

For example: If you’re skilled at tokenomics, CEX listings, networking, etc., then you should focus on building a grand narrative and vision. Once the narrative is strong enough, it may also become useful—like Solana, where capital attracted talent, ultimately making the chain practical.

If you want to build a narrative with a market cap of $1.1 billions+, you must start from first principles and think about what unique possibilities crypto technology can achieve.

Is this vision convincing enough? If realized, can it support a $100 billions+ market? Is it attractive enough to retail investors? (For example, Plasma, which hasn’t been used yet, but with the narrative of a “$1 trillion stablecoin market,” reached a valuation of $14 billions at TGE.)

If you’re good at building products, then you should build usable crypto projects—solving a problem in a niche market (such as Axiom serving memecoin traders, or a DeFi protocol).

The core of Usable Crypto is to build products that traders (or crypto natives) directly need (such as terminals/exchanges) or indirectly need (such as stablecoins). It doesn’t have to serve only speculation; the same product can have non-speculative uses (such as stablecoins for payments).

Additionally, narrative is also important here (for example, Polymarket’s narrative is “prediction markets”)—narrative is marketing.

Of course, you can build both at the same time, but it’s best to focus on one at the beginning and build a strong advantage in it. Finding your “edge” is key.

For Traders:

You are always betting on narratives.

You’re betting on the narrative you think has the most potential in the coming weeks, months, or even years.

Everyone trading tokens is actually playing an “attention arbitrage” game—buying into projects gaining attention, selling those that are out of the spotlight. For example, rotating from perpetual contract coins to privacy coins, then to AI coins.

Within a narrative, you want to bet on the teams you think are most likely to gain attention, becoming the alpha or beta project in that narrative. If they succeed, your bet will take off.

TL;DR

Usable Crypto and Narrative Crypto are two equally important aspects of the crypto world.

As a builder, you should choose one direction at the start and excel in it. Once you’ve established yourself in one direction, then expand to the other—this is the ultimate goal.

I personally learned these lessons through “trial and error” during my full-time entrepreneurship over the past year. I used to have a “middle-of-the-road” mindset, and ended up achieving nothing.

But ultimately, this is a game—you have to play by the rules of the market.