Bear market survival rules: focus only on cash flow

Recently, old projects in the crypto ecosystem have kicked off a migration wave—many of them have moved from their original chains, or even outright abandoned the chains they built themselves, and migrated to more mature, more popular chains.

For example:

• @Sophon从zkSync迁移到了BASE in the zkSync ecosystem;

• the leading parachain in the Polkadot ecosystem @MoonbeamNetwork迁移到了BASE;

• the once highly anticipated top-tier privacy chain @SecretNetwork从Cosmos迁移到了Arbitrum.

If we also include projects that migrated earlier, there are even more.

To summarize the projects that have migrated over these years, they basically share the following characteristics:

• Choosing lower-fee Layer 2 scaling

This category mainly consists of projects that originally ran on Ethereum’s mainnet.

Because Ethereum’s transaction fees were too high before last year’s upgrades, some projects migrated to Layer 2 scaling solutions in order to avoid operating costs.

Most of this group are non-financial projects and high-frequency applications—for example, the once well-known social project Farcaster. Financial projects generally rarely make migrations like this.

• The target chains of migration are mainly Base and Arbitrum

According to defillama (

This leading position, from a data perspective, reflects the accumulation of funds (TVL); from an ecosystem perspective, it is a sign of project collaboration and ecosystem prosperity. This means that in an ecosystem like this, as long as a project can share a bit of the money flow and user hype, it has a greater chance of surviving.

So for those projects that don’t have the resources to build their own ecosystems and can’t attract user attention, BASE and Arbitrum are essentially their last lifeline.

In fact, project migration has happened from time to time in past bear markets too, but why is it happening more frequently in this bear market—and why are the projects involved at a higher level?

Because this bear market presents bigger—and more brutal—challenges to the crypto ecosystem than in the past.

In past bear markets, external challenges and competition faced by the crypto ecosystem were actually not that great. The main issues were those inherent to the cycle itself: capital didn’t dare enter, and it was hard to gather user attention.

But in this bear market, the crypto ecosystem isn’t only dealing with the constraints inherent to the cycle itself—it is also facing enormous competition from the outside, especially from the AI ecosystem.

In past bear markets, some unremarkable projects without distinguishing features might still have been able to hope that when the next bull market arrives, they could ride the market’s heat to hype up old narratives again—but in the future, that possibility is almost zero.

So if a project can’t survive this bear market, it’s basically sentenced to death—it won’t even have a chance to pivot in the future.

I believe many projects have realized this, so for them, this bear market is the only opportunity to fight for that last shred of survival.

Actually, the projects that can still migrate are already somewhat lucky. And some former top-tier projects have already shut down in this round—for example, Zapper, the former DeFi asset management top project, which was just officially announced to be shutting down a few days ago.

So for these projects migrating to high-hype ecosystems, can they make it through this round of the bear market?

I think most of them can only manage a short-lived rebound—nothing more than the final, desperate struggle.

The reason these projects have ended up like this is mainly that they have never been able to adapt to the evolution of the ecosystem, and they have never found a model that can deliver stable revenue.

They couldn’t find it in these past years—so will they be able to find it in the future?

The odds are simply too small.

From this, it’s now possible to roughly guess which projects will be able to survive after this bear-market cleansing.

Aside from the few projects that manage to survive, all the other projects that have existed for several years but still haven’t turned things around and still have no revenue—no matter how good their reputation used to be or how high their hype used to be—can be ignored now.

We only need to focus on projects that can create new models, new scenarios, and new applications—and that can reliably generate cash income.