Cargo Cults: Why Not to Build Straw Airplanes

Happy Friday Bitcoiners!

During World War II, the Allied forces built airstrips on remote Pacific islands. Planes landed daily with food, medicine, and various supplies for the army.

Local islanders watched in awe as this massive metal bird flew through the sky delivering resources. Then the war ended and the planes stopped coming.

So what did the islanders do?

They built their own runways out of carved bamboo. They carved wooden headphones and sat in makeshift control towers. They waved landing signals at empty skies. They built perfect replicas of airplanes out of straw.

The planes never came back and thus, the worlds first ‘Cargo Cult’ was officially born.

This week we're diving into👇

• What cargo cults teach us about copying without understanding

• How Kadena became crypto's perfect cargo cult (and just imploded)

• Your own mental toolkit to avoid these traps.

Let’s get it!

1️⃣ The Cargo Cult: When Copycats Meets Delusion

The term "cargo cult" describes copying the surface features of success without understanding the actual mechanisms underneath.

The Pacific islanders saw correlation everywhere. Airstrips preceded cargo deliveries. Control towers preceded planes. Uniformed personnel preceded supplies. So they replicated what they could see.

What they couldn't see was the supply chain, military logistics, and communication systems that actually made deliveries possible. They copied appearances. They missed substance entirely.

Rolf Dobelli nailed this in his writing on decision-making: Don't believe in something just because you see the end result. You need to understand the underlying mechanisms that created it.

This shows up everywhere. Startups copy Google's office perks without Google's engineering culture. Investors chase "the next Amazon" without understanding what made Amazon work.

In crypto? Cargo cult thinking is the business model.

2️⃣ Kadena: The Blockchain That Built Straw Airplanes

Kadena just shut down operations. Let me show you what a crypto cargo cult looks like when it collapses.

On paper, Kadena had everything. JP Morgan alumni founders (sexy pedigree). Proof-of-Work like Bitcoin. Claims of infinite scalability. The token pumped from $0.33 to $24.50 in the last bull market.

They built a beautiful straw airplane (or so they thought).

Here's what they copied: Bitcoin's buzzwords. Proof-of-Work. Decentralization. Scalability. Smart contracts. All the surface features that impress VCs and retail investors.

Here's what they didn't copy: Actual decentralization. Community-driven development. The unglamorous grind of building real adoption.

The numbers are brutal. Kadena's TVL peaked at $11 million. After the shutdown? Down to $128,000. A 98.8% collapse in days. Exchanges started delisting immediately.

But here's where it gets really ugly. Hours before the official shutdown announcement, someone shorted KDA heavily.

Look at the chart below - see the massive volume spike right before the announcement (green circle highlight)?

Someone knew something…

Insiders? The team themselves? Nobody knows for certain. But the timing screams front-running.

And what was Kadena doing weeks before imploding? Pure cargo cult theater. They released a video showcasing "commitments from 70+ projects" on their new chain. Days before shutdown, they tweeted about $50 million in grants for developers.

Meanwhile, they were flying team members around the world for conferences while the protocol hemorrhaged users and liquidity.

Classic cargo cult behavior: spend everything on appearances while fundamentals rot.

Now here's the kicker. People are filing lawsuits against Kadena. You can sue them because there's a Cayman Islands foundation with identifiable directors.

You can't sue Bitcoin. No CEO. No foundation. No off switch. Bitcoin can't "shut down operations" even if someone wanted it to.

That's not a bug. That's the entire point.

Is Bitcoin a cargo cult? Critics love this angle. "Digital beads! Collective delusion!"

Here's the difference: Bitcoin didn't copy anything, but rather was the OG - it created the first truly decentralized, censorship-resistant digital money. Sixteen years surviving government bans, exchange collapses, and thousands of "Bitcoin killers" (just like Kadena).

As we covered in The Lindy Effect, every year Bitcoin survives makes the next year more likely. Kadena died after just a few years. The market knows which airplane is made out of straw.

3️⃣ Your Cargo Cult Detection Toolkit

1. Ask "Why" Three Times

Don't accept surface explanations. Kadena claimed "scalability." Why does that matter? "Bitcoin is slow." Why is Bitcoin slow? "It prioritizes decentralization over speed." Why does that tradeoff exist?

By the third "why," you hit fundamentals. Cargo cults collapse by question two.

2. Know the Other Side Better Than They Do

Munger's rule: "I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do."

Can you articulate why someone would NOT use the thing you're investing in? If you can't steelman the opposition, you don't understand the investment. As we explored in Understanding Your Circle of Competence, knowing what you don't know beats pretending expertise.

3. Cut Your Losses Early

Kadena holders rode it to zero, married to their positions while fundamentals deteriorated. Don't fall in love with an idea because you invested time or money.

Test your thesis constantly. When facts change, change your mind. Pride is expensive.

4. Focus on Fundamentals Over Flash

Kadena had JP Morgan pedigree, conference appearances, grant programs. Pure noise.

What matters? Actual usage. Real adoption. Hash rate (for PoW chains). Developer activity not subsidized by foundation grants. These metrics can't be faked long-term.

If a project spends more energy on marketing than building, you're looking at a cargo cult.

Key Takeaway

Cargo cults fail because they mistake correlation for causation. Islanders thought runways caused planes. Kadena thought copying Bitcoin's buzzwords would create Bitcoin's success.

The market always figures out which airplanes are straw. Kadena: $24.50 to zero. Bitcoin: 16 years of operating without permission, surviving without a CEO, growing without VC money.

Before investing in anything, ask: Am I buying substance or theater?

The market takes time to cast its verdict. But when it does, there's no Cayman Islands foundation to sue.

Stay grounded,

@Publius256

P.S. We’re doing our best to orange pill the world by helping educate and share timeless Bitcoin principles.

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