The Year of Narrative Collapse: A Portrait of Project "Deaths" in 2025

Original author: zhou, ChainCatcher

The year 2025 is destined to be a year repeatedly scrutinized by crypto investors and practitioners.

This year, the market accelerated the concentrated liquidation of financing illusions and narrative bubbles, beginning to shift from speculation-driven false prosperity to a value-based clearing of existing stock.

As the illusion of liquidity faded, once high-flying pioneers fell one after another. In the throes of this life-or-death struggle, the industry forced every participant to re-examine the rules of survival here.

2025 Project "Death" Profile: From Narrative Clearing to Logical Judgment

On December 30, the RootData platform updated a list of dead crypto projects for 2025. These projects have either announced a halt in operations, declared bankruptcy, or have been deemed "dead" due to their websites being unusable for an extended period. The list is still being updated.

Source: RootData

Looking back at past data, the market was still in the early stages of a bull run in 2021, with hidden risks, recording 67 failure cases. Subsequently, in 2022 and 2023, triggered by the deep-water chain reactions from black swan events like the FTX collapse and the Luna crash, the number of failed projects soared to 250 and 230, respectively. In 2024, as the market gradually stabilized, the failure rate dropped back to 171.

Unlike the passive deaths caused by sudden collapses in the past, the current wave of failures points more to the collapse of business logic under extreme pressure, and is highly concentrated in hot sectors that were once heavily invested in by capital.

Specifically, the GameFi sector was the hardest hit, with a large number of projects including COMBO, Nyan Heroes, and Ember Sword shutting down one after another. The NFT sector was also devastated, with once highly-focused platforms like Royal, RECUR, and X2Y2 on the list.

Furthermore, competition at the infrastructure level has become increasingly brutal. Projects like CLV and Vega Protocol exited due to weak ecosystems, while automated market makers like Bunni, which suffered fatal blows from hackers, reflect the devastating impact of missing security boundaries on protocol survival.

Beyond the explicit death list, RootData's "Zombie Projects" compilation exposed hundreds of projects on the brink of death. Most were born around the cycle transition point of 2022-2023. Although not declared bankrupt, these projects have fallen into inactivity, with no updates to product features or operational activities in recent years.

Among them are remnants of the metaverse and gaming narratives (Spatial, GameSwift, etc.), once highly anticipated DeFi protocols (finance.vote, Set Protocol, AutoFarm, etc.), and infrastructure and developer platforms (Reach, Pinknode, Unlock Protocol, etc.).

Source: RootData

The Evolution of the Industry's Underlying Logic: From Narrative Illusion to Value Reconstruction

The root cause of the 2025 wave of project failures lies in a fundamental shift in the industry's underlying business logic.

Taking the GameFi sector as an example, Delphi Digital pointed out that the industry performed extremely poorly in 2025, with fundraising plummeting by over 55% year-on-year. Some once highly anticipated star products performed mediocrely after launch, causing market enthusiasm to freeze rapidly. Data shows the GameFi market size shrank from $23.75 billion at the beginning of the year to $9.03 billion by year-end, a drop of over 60%.

This dire situation reveals the inherent fragility of the once-prevalent "Play-to-earn" model: in the absence of sustained external incremental capital inflows, highly inflationary token economic models not only fail to sustain themselves but accelerate user churn. Although many projects attempted to find a lifeline by pivoting to Telegram mini-apps, the ecosystem fracture caused by stalled mainnet operations led to mostly failed user migrations, with the entire sector's transaction volume plummeting over 70%.

The collapse of the NFT market is even more cautionary. Data shows the NFT market hit its annual low in December, with total valuation crashing from $9.2 billion in January to $2.5 billion, a staggering 72% drop. Meanwhile, market activity experienced a cliff-like decline. According to CryptoSlam data, the number of sellers fell below the 100,000 mark for the first time since April 2021.

The root cause is the fatal flaw of lacking utility. According to Bloomberg observations, the crypto elite have begun restructuring their asset allocations, shifting focus from digital art to more certain tangible scarce assets.

In reality, the collapse of GameFi and NFTs did not happen overnight. Many GameFi projects showed signs as early as 2022, with user churn and inflation accelerating, while NFTs remained depressed after secondary market liquidity dried up, now entering the final clearing stage.

Furthermore, the DeFi sector was not spared either, with Total Value Locked (TVL) falling over 20% for the year. On one hand, frequent and high-value hacks shook user trust in protocol security boundaries; on the other hand, the exhaustion of yields in a zero-sum game caused a large amount of "floating capital" chasing high interest to accelerate its outflow.

Looking at the big picture, the pain of 2025 proves that projects characterized by "low effort, high leverage" have lost their footing. The crypto market is undergoing a paradigm shift from speculation-driven to value-driven. Only entities with sustainable business models can establish themselves in the new order.

The Failure of Capital Endorsement: The Collective Fall of Star Projects

In the 2025 liquidation wave, massive fundraising and top-tier institutional backing failed to serve as a "safe harbor" for projects.

Data indicates that even projects once highly favored by top VCs like a16z, Pantera, and Polychain could not escape failure when lacking genuine traction and self-sustaining capabilities.

1. Vision vs. Reality Misalignment: The Liquidation of High-Funded Projects

Among the publicly disclosed dead projects, Vega Protocol, which ranked high in fundraising, once secured over $100 million in cumulative investment from 29 top-tier capitals including Coinbase Ventures and Ripple, based on its vision for decentralized derivatives. However, its mainnet TVL long remained at the hundreds of thousands of dollars level, far behind competitors like Hyperliquid. Ultimately, squeezed by weak user growth and depleted resources, the project closed its Layer 1 mainnet via community vote and pivoted to software development.

2. NFT Bubble Burst: Chain Reaction Triggered by Liquidity Drought

The collective failure in the NFT sector exhibits clear characteristics of "narrative collapse." The music NFT platform Royal (raised $71 million), despite support and celebrity backing from a16z, still faced a broken capital chain due to a 66% plunge in secondary market trading volume and an inability to break through mainstream utility bottlenecks. Similarly, RECUR (raised $55 million), once valued at over $300 million based on brand IP, and the veteran platform MakersPlace (raised $30 million), gradually exited the stage due to market saturation, revenue collapse, and a cliff-like drop in user engagement.

3. Sector Squeeze and Ecosystem Decline: The End of Technical Narratives

In the infrastructure field, the rise and fall of an ecosystem directly determines a project's fate. CLV (Clover Finance), after receiving $47.1 million in investment from OKX Ventures, Polychain, and others, ultimately shut down due to the Polkadot ecosystem's decline, delistings from multiple exchanges, and liquidity drying up. Fractal Network was forced to shut down under pressure from monopolization in the ZK sector, due to excessively long technology implementation cycles and low market adoption.

4. Structural Flaws: From Metaverse Recession to Protocol Security

Futureverse (raised $54 million) entered liquidation under the dual blows of metaverse recession and insufficient revenue; COMBO (raised $40 million) exhausted its funds due to the failure of the GameFi model and unsuccessful user migration. Additionally, the DeFi protocol DELV, once valued at over $300 million, ultimately chose to terminate operations due to prohibitively high costs to fix core vulnerabilities and a lack of product-market fit.

These cases send a clear signal: in an era of increasingly conservative investment attitudes, fundraising size and institutional halo are no longer talismans.

Projects lacking genuine user retention and sustainable business models, regardless of their high starting point, quickly face the ultimate fate of a broken capital chain once external capital infusion stops.

Conclusion

Growing pains are an inevitable part of the path to maturity. In the crypto world, high funding, star VCs, and hot sectors cannot guarantee survival.

In this life-or-death struggle, the industry will ultimately understand: all revelries that deviate from business common sense must end in liquidation.

After all, crypto has no eternal winter or summer. Survival is the only narrative that matters.