Thousands in funding couldn't save them. Who in the crypto industry has fallen this year?

Original by Odaily Planet Daily (@OdailyChina)

Author: Asher (@Asher_0210)

Last weekend, the veteran crypto exchange BitMart suddenly announced it would cease operations in an orderly manner, once again sparking market discussions on the survival conditions of crypto projects.

In reality, since the start of this year, it's not just small and medium-sized projects that have chosen to shut down. Among them are star projects that once raised tens of millions of dollars, had millions of users, and even led their specific niches.

From NFTs, DeFi, and Layer 2 to wallets, exchanges, and infrastructure, the reasons for these projects failing vary. Odaily Planet Daily has compiled a list of highly funded and hyped crypto projects that announced closures this year, examining why these once darlings of capital and the market ultimately failed to survive.

Reason 1: Unsustainable Business Model

These projects weren't lacking in users, trading volume, or funding. In fact, many boasted impressive metrics at their peak. However, they ultimately failed to convert this scale into sufficient revenue to sustain long-term operations.

Zapper

Founded in 2019, Zapper was one of DeFi's most well-known asset management and portfolio tracking tools in its early days. At its peak, it had over 2 million monthly active users and processed over $13 billion in cumulative transactions. The project raised approximately $16.5 million, including a $15 million Series A round led by Framework Ventures and Sound Ventures in 2021.

Zapper rapidly accumulated users initially through asset tracking and transaction aggregation. However, as it expanded into NFTs, on-chain social features, block explorers, and data APIs, it never developed a stable revenue stream matching its user base. Despite having over 2 million peak monthly active users and processing over $13 billion in trading volume, this traffic and scale never translated into sustainable commercial returns. After evaluating various options to continue operations, the team chose an orderly exit, planning to shut down its website, App, and API services on August 3rd.

Everclear

Everclear was formerly Connext, a cross-chain protocol established in 2017, before pivoting to a cross-chain settlement and clearing network. The project raised a total of approximately $26.7 million from investors including Polychain Capital, Coinbase Ventures, and 1kx.

The team stated that users were highly price-sensitive, and the onboarding of several signed major clients was slower than anticipated. Before these partnerships could generate stable revenue, the project's funds were depleted, leading to the decision to shut down both the protocol and the team.

DL News

Launched in 2022, DL News began as the news arm of the DeFi data platform DefiLlama, focusing on independent reporting and investigative journalism. It aimed to distinguish itself from traditional media's bias against Crypto and avoid the excessive hype often found in industry media.

After internal conflicts at DefiLlama in 2023, the two entities largely decoupled, cutting off DL News's traffic source. Concurrently, web traffic for crypto and tech media declined overall, further siphoned by AI search and content aggregators. While its subsidiary, DL Research, saw revenue grow by 270% in 2025, surpassing $1 million in annual sales, it wasn't enough to sustain the entire media operation, which ultimately shut down at the end of May this year.

Fantasy.top

Fantasy.top launched in 2024 as a SocialFi game on the Blast ecosystem, turning Crypto KOLs into NFT cards. Users formed teams to compete based on a KOL's interaction data on X. The project raised $4.25 million, led by Dragonfly with participation from Manifold Ventures.

Early on, Fantasy.top generated substantial revenue from NFT card trading. However, the team realized this trading volume couldn't sustain the game long-term. Subsequent attempts involving prediction markets, social data, and other gameplay mechanics failed to identify a direction that could consistently attract users and support revenue. The team announced the end of operations in May this year and completed the shutdown in June.

Satori Finance

Launched in 2022, Satori Finance was a multi-chain perpetual DEX, operating on networks like Arbitrum, Base, and zkSync. The project raised $10 million in funding, led by Polychain Capital with participation from Coinbase Ventures and Jump Crypto. It processed over $134 billion in cumulative perpetual contract trading volume.

Despite the massive cumulative trading scale, its actual sustainable revenue was limited. Protocol revenue in Q1 2026 was approximately $580,000, which subsequently declined sharply. The team announced the cessation of operations, requiring users to close positions and withdraw assets by July 16th.

Yupp

Yupp is an AI model evaluation platform where users can compare hundreds of AI models for free and provide feedback to help model developers gather preference data. The project raised a $33 million seed round led by a16z crypto.

With the rapid improvement of model capabilities, the industry's focus shifted from simple chatbots to Agents. The demand from model developers for public crowdsourced evaluation data also changed. The team ultimately decided to stop further investment and returned the remaining funds to investors.

Legend

Founded in 2024 by former Compound executives, Legend was positioned as a mobile-first DeFi Super App for mainstream users. It integrated yield, lending, and trading functions from protocols like Aave, Compound, and Uniswap into a single application. In 2025, it raised $15 million from a16z crypto and Coinbase Ventures.

Founder Jayson Hobby reflected that mainstream users don't care if a product is "on-chain"; they focus on practical experiences like returns and payment speed. Simply lowering the barrier to entry for DeFi is insufficient to achieve mass adoption. The team decided to cease development, and the application officially shut down on July 12th this year.

Entropy

Founded in 2021, Entropy initially focused on decentralized asset custody and threshold signature infrastructure, before pivoting direction multiple times. The project raised nearly $27 million in total, including a $25 million seed round led by a16z in 2022, with participation from Dragonfly, Variant, and Coinbase Ventures.

After several pivots and two rounds of layoffs, Entropy shifted to a crypto automation platform in 2025, aiming to be the "Crypto version of Zapier/n8nC." However, early market feedback suggested this model struggled to reach the scale required by VCs. The founder, unwilling to pivot again, ultimately chose to close the company and return the remaining funds to investors.

Reason 2: Sector Cooldown

These projects once bet on a hot narrative, but the actual market demand ultimately didn't develop to the initially expected scale. As the sector cooled, their initial growth logic became invalid.

NFTfi

Launched in 2020, NFTfi was one of the earliest NFT collateralized lending protocols, allowing holders to collateralize NFTs for liquidity. The project completed 6 funding rounds totaling approximately $11.89 million, including a $6 million Series A in 2024. Over six years of operation, the platform facilitated over $737 million in loans across 82,000 peer-to-peer transactions.

With the persistent downturn of the NFT market, NFTfi's potential revenue could no longer cover protocol operating costs. While the team remained optimistic about the long-term value of NFTs, the lack of certainty regarding market recovery and the inability to continue subsidizing protocol operations long-term led to the decision to halt new loans. The front end is scheduled to close on August 31st this year, while the on-chain contracts will remain.

Parsec

Starting as an analytical tool for Uniswap v1 in 2020, Parsec evolved into an on-chain data terminal for DeFi and NFTs, offering custom dashboards and APIs. The project raised approximately $5.25 million from investors like Galaxy Digital, Polychain Capital, Uniswap Ventures, and Robot Ventures.

Parsec's core demand historically came from periods of high DeFi leveraged trading and NFT activity, especially during events like the Terra and 3AC collapses. However, after the FTX crash, the structure of DeFi spot lending and leveraged trading changed significantly. The original demand never recovered, and the NFT market continued to cool. Founder Will Sheehan admitted the team misjudged market directions multiple times, ultimately shutting down the platform in February this year and refunding remaining subscription fees.

MilkyWay

Launched in 2023, MilkyWay was the first liquid staking protocol on the Celestia ecosystem, later expanding to Initia, Babylon, and restaking services, reaching a TVL of $250 million at its peak. The project raised approximately $6 million, including a $5 million seed round led by Polychain Capital with participation from Binance Labs and Hack VC.

Activity on Celestia's DeFi ecosystem didn't explode as the team anticipated, and the demand for restaking quickly faded. MilkyWay subsequently attempted to pivot to RWA and payment card businesses but failed to find a sustainable direction. The team ultimately decided to permanently shut down the protocol.

Tally

Founded in 2020, Tally was an on-chain governance infrastructure platform, providing voting, proposal, and delegation tools for over 500 DAOs, including Uniswap, Arbitrum, and ENS. The project raised approximately $17 million, including an $8 million Series A round in 2025 from AppWorks, Blockchain Capital, and 1kx.

Tally had bet on a future with thousands of L2s and numerous DAOs, but the industry concentrated on a few leading protocols. Consumer-grade on-chain applications also failed to materialize as expected, leaving the potential customer base for governance tools far lower than anticipated. With a loosening regulatory environment, the incentive for projects to achieve decentralized governance via DAOs further diminished. Tally had planned an ICO to find new growth but ultimately abandoned the token launch and announced its closure in March this year.

Botanix

Started in 2022, Botanix focused on Spiderchain, a Bitcoin-based EVM-compatible Layer 2, aiming to develop BTCFi without relying on token, points, or airdrop incentives. The project raised $11.5 million from investors including Polychain Capital, Placeholder, Valor Equity Partners, and ABCDE.

Botanix ultimately didn't see the anticipated demand for Bitcoin DeFi. The team found that most needs like lending, yield, and leverage could be met via WBTC and mature L2s, giving users little incentive to migrate to a dedicated Bitcoin L2. The fees generated on the network were also insufficient to cover infrastructure costs. Meanwhile, on-chain traffic further consolidated towards platforms with direct user interfaces like Hyperliquid and CEXs. Botanix announced the cessation of operations in June this year and entered the network wind-down process.

Colony

Founded in 2021, Colony was an ecosystem investment and acceleration platform focused on Avalanche. It raised approximately $19.5 million from investors including the Avalanche Foundation, HashKey Capital, Shima Capital, and GBV Capital, providing early-stage investment and liquidity support for Avalanche projects long-term.

As the number and quality of new projects within the Avalanche ecosystem declined, external VC participation also waned. The HyperSDK product, developed over a year, was shelved due to changes in Avalanche's technical roadmap. Subsequently, the key BTC.b project lost its basis for implementation due to changes in asset management rights. After these two core bets failed, Colony announced the end of its five-year Avalanche ecosystem operations and ceased application services in July.

Reason 3: Security Incidents

For these projects, the issue wasn't just about product-market fit. Hacker attacks, asset losses, liquidity drains, and exhausted runways ultimately stripped them of the ability to continue operations.

AscendEX

AscendEX, formerly known as BitMax, launched in 2018 as a centralized exchange offering spot, futures, and staking services. It raised $50 million in a Series B round in 2021, led by Polychain Capital and Hack VC, with participation from Jump Capital and Alameda Research.

AscendEX suffered a hot wallet attack in 2021, losing approximately $77.7 million, and subsequently promised full compensation to users. By the time of its closure this year, financial pressures resurfaced. A strategic transaction intended to replenish liquidity failed to complete, leading to restricted user withdrawals. The platform eventually suspended automatic withdrawals, stating it couldn't guarantee withdrawal times or amounts. Citing MiCA compliance pressures and other financial/operational factors, AscendEX officially ceased operations on July 1st.

ZeroLend

Launched in 2023, ZeroLend was a DeFi lending protocol deployed on multiple chains like zkSync, Linea, and Manta, with a peak TVL of nearly $359 million. The project completed a $3 million seed round in 2024 from investors including Morningstar Ventures and Cypher Capital.

In February 2025, ZeroLend's LBTC market on Base was attacked. The attacker used a mechanism related to PT-LBTC to siphon approximately 3.92 LBTC. Affected users only received partial compensation by the time the project shut down. Subsequently, ZeroLend faced liquidity drains on early support chains like Manta, Zircuit, and XLayer, alongside the discontinuation of oracle support. Combined with low profit margins in lending and high security costs, the protocol operated at a loss for an extended period, leading the team to decide on cessation.

Ctrl Wallet

Ctrl Wallet, formerly XDEFI Wallet, was founded in 2020 as a self-custody wallet for multi-chain asset management, Swaps, and DApp interaction. The project raised approximately $26.6 million from investors including Mechanism Capital and DeFiance Capital.

On June 23rd this year, Ctrl Wallet disclosed a security incident, stating that some Cardano wallets were affected and related features were suspended. The exact loss amount was not disclosed. The platform did not fully recover subsequently. Just about two weeks later, on July 7th, it announced a permanent shutdown, delisted itself from app stores, and ceased major functions like transfers, Swaps, and DApp interactions starting August 3rd.

Syndicate

Founded in 2021, Syndicate initially offered on-chain investment club and DAO tools before pivoting to Rollup, app-chain, and sequencer infrastructure. The project raised approximately $27.8 million, including a $20 million Series A round led by a16z in 2021, with participation from Coinbase Ventures and Electric Capital.

In April this year, Syndicate's official cross-chain bridge, Commons, was attacked. The attacker drained and dumped approximately 18.5 million SYND tokens, cashing out about $330,000, leading to the closure of Commons. One month later, Syndicate announced it was shutting down operations.

Reason 4: Abandoning the Original Technical Roadmap

Some projects didn't suddenly face a cash flow crisis. Instead, they gradually lost their technical edge and reason for existence amid industry evolution. For these long-running older projects, the final choice was to simply abandon their legacy path.

Loopring

Founded in 2017, Loopring was one of the earliest zkRollup projects on Ethereum, focusing on Layer 2 DEX, payments, and smart wallets. Its 2017 ICO raised approximately $45 million. In June this year, Loopring officially shut down its DEX, and its sequencer went offline.

The team acknowledged that early zkRollup lacked virtual machines and composability, and the payment use case never achieved significant adoption. Subsequent zkEVM routes were surpassed by newer, compatible solutions. Additionally, LRC's delisting from major exchanges in 2026 further contracted the ecosystem. In 2024, Loopring also suffered an exploit of its Guardian service, resulting in the theft of approximately $5 million in assets, after which its wallet and several DeFi products were gradually phased out.

ICON

Launched in 2017, ICON was an early representative L1 from Korea, focusing on blockchain interoperability. The project raised approximately $43 million in its early days, with participation from Pantera Capital and Kenetic Capital. After nearly 9 years of operation, ICON's technology and community are gradually migrating to the cross-chain DeFi infrastructure SODAX.

As industry infrastructure matured, the team believed that continuing to maintain an independent Layer 1 would disperse funding and development resources. Therefore, they chose to cease ICX incentives and concentrate resources on SODAX. ICON entered its economic shutdown phase in March this year and plans to permanently stop network operations on December 31st.