From $70 million in funding to shutting down its network, Sophon took two and a half years
- Core Viewpoint: Modular blockchain project Sophon, which raised over $70 million, has announced that its mainnet will shut down on November 30, marking the end of an era for crypto projects sustained solely by narrative, with general-purpose L2s and AppChains entering the elimination phase.
- Key Elements:
- Sophon raised a cumulative total of over $70 million, with investors including Binance Labs, OKX Ventures, and others. Its token price has continued to decline since its TGE in May 2025.
- The official disclosure states that annual hard costs for chain infrastructure and related expenses are approximately $3.4 million. After shutdown, an estimated $3 million per year is expected to be saved to extend the funding runway.
- In June, the project had already announced the closure of its own L2 and migration to Base, pivoting toward consumer-facing application development, believing that value lies in the application layer rather than the underlying rails.
- TVL dropped from a peak of approximately $20.1 million in May 2025 to about $16,500, with on-chain fees, revenue, and active addresses all having dropped to zero.
- At the industry level, DA layers (Celestia, Avail, EigenDA) are still advancing technical metrics, but real fees and large-scale adoption remain bottlenecks.
- The application layer is concentrating toward leaders such as Base, Arbitrum, and Polygon Agglayer, and the costs and barriers of building general-purpose chains in-house are being recalculated.
Original | Odaily (@OdailyChina)
Author | Wenser (@wenser 2010 )
On October 20, modular blockchain project Sophon, which has raised over $70 million in cumulative funding, announced that its mainnet will be permanently shut down on November 30, and users must withdraw their assets by November 25. The mainnet shutdown was long in the planning: back in June this year, the team announced it would shut down its L2 network and migrate to Base, pivoting toward consumer application development.
From the investor enthusiasm and market optimism of 2024, to the consumer application pivot in June this year, and now to the imminent official mainnet shutdown, Sophon has taken two and a half years. The era of surviving on narrative alone has quietly come to an end. Many crypto projects, including modular blockchains, now need to rethink whether they can find a new engine for generating revenue.
Over $70 Million Raised, Yet the Mainnet Still Shuts Down: The Hard Costs and Soft Risks Facing Sophon
Sophon was once highly sought after by the market thanks to its hefty $70 million+ fundraising, and its 2025 TGE launched on multiple top-tier CEXs, backed by investment institutions affiliated with Binance and OKX. But modular blockchains are no longer in vogue, and the various hard technical costs facing the project are very real. Perhaps an orderly mainnet shutdown is the best possible outcome, and countless users can only quietly accept it.
The Road Taken: $70 Million Raised, Backed by OKX Ventures, Binance Labs (now Yzi Labs)
In March 2024, Sophon completed a $10 million funding round, with investors including Paper Ventures, Maven 11 Capital, The Spartan Group, SevenX Ventures, OKX Ventures, HTX Ventures, and others.
In May 2024, Sophon raised $60 million through a node sale, enjoying a moment of unrivaled limelight.
In October 2024, Sophon's investor list received another heavyweight update — Binance Labs (now Yzi Labs) participated in the round. Although the specific investment amount was not disclosed at the time, the move paved the way for the token's eventual listing on Binance.
In December 2024, Sophon's mainnet officially launched.
In May 2025, Sophon officially conducted its TGE. The SOPH token has a total supply of 10 billion, of which 57% is allocated to the community and 9% for airdrops. SOPH subsequently listed on top CEXs including Binance, OKX, Upbit, and Gate. The price peaked at $0.111 before falling back, and has been declining ever since, gradually fading from public view like other modular blockchain networks.
The next update milestone came in June this year. Sophon was about to shut down its own Layer 2 blockchain and migrate to Base.
On June 25 this year, Sophon officially announced the closure of its own Layer 2 blockchain and its migration to Base, with future focus shifting to consumer-grade application development. Co-founder Sebastien said the team judged that the real value lies not in "who runs the underlying rails" but in the products built on top of them. As such, Sophon will no longer maintain infrastructure and will instead concentrate resources on the application layer.
The team also disclosed the annual hard costs of maintaining Sophon: chain infrastructure, RaaS, data, analytics, and development tools together total roughly $3.4 million per year. After the shutdown, the project expects to save about $3 million annually, which will be used to extend its funding runway and invest in application development.
Sophon's shutdown plan subsequently triggered a chain of reactions: Binance halted on-chain deposits and withdrawals, LayerZero stopped providing off-chain support, and Upbit terminated trading support. The SOPH token price naturally plummeted. According to DeFiLlama, its TVL has fallen from a peak of about $20.1 million on May 30, 2025, to roughly $16,500, with on-chain fees, revenue, and active addresses all dropping to zero.
Thus, a star project that once raised tens of millions of dollars has gradually reached its moment of exit.
For Sophon network participants, there are really only 3 points worth noting:
- First, withdraw liquid assets (SOPH, ETH, USDC, etc.) through official channels, and claim any previously unclaimed staking or Guardian rewards.
- Second, unwithdrawn Sophon farm assets should be handled through official channels.
- Third, node holders and others must follow the official migration guide. New deposits have been closed since June 25, 2026, and SOPH itself already has an Ethereum ERC-20 version.
In addition, all of the above operations must be completed before November 25 — do not wait until the mainnet officially shuts down on November 30 to act.
The State of Modular Blockchains: DA Layers Still Going, General-Purpose L2s Exiting
With Sophon's mainnet shutdown, the next question the market is watching is: has the modular blockchain network thesis been completely disproven?
For now, it's hard to conclude "yes." Looking at the modular blockchain projects still in the market, there are still highly active popular projects, but general-purpose L2s and AppChains have indeed entered the elimination phase. Overall,
- DA layers (such as Celestia, Avail, EigenDA): technical metrics like throughput and sampling volume continue to improve, but real fees and large-scale adoption remain bottlenecks; some projects are experimenting with new narratives such as AI payments and the agent economy.
- The application layer is concentrating toward the top: mature L2s like Base and Arbitrum, along with aggregation solutions like Polygon Agglayer, have become the default choices, and the cost and barriers of building a general-purpose chain in-house are being recalculated.
For ZK Stack/Rollup projects like Sophon, even with backing from institutions like Binance Labs and OKX Ventures, it is very difficult to survive the next cycle without a clear business model and sustained revenue. Abstract and Blast came before, and more blockchain network ecosystems resembling "on-chain ghost towns" will join their ranks in the future.
After all, a hot narrative can only earn a project a fleeting moment of market追捧 and a base of participants. In a protracted war, what really matters is whether you can secure long-term liquidity funding by stimulating trading activity and building out your ecosystem.
