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Original: Odaily Planet Daily (@OdailyChina)

Author: Asher (@Asher_0210)

Last weekend, established crypto exchange BitMart suddenly announced an orderly shutdown, once again sparking market discussions about the survival conditions of crypto projects.

In reality, this year, it's not just small and medium 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 niche sectors.

From NFTs, DeFi, and Layer 2 to wallets, exchanges, and infrastructure, the reasons for project failures vary. Odaily Planet Daily has compiled a list of highly-funded, high-profile crypto projects that announced shutdowns this year, exploring why these once market- and capital-favored projects ultimately failed to survive.

Reason 1: Unsustainable Business Model

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

Zapper

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

Zapper initially gained users rapidly 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 commensurate with its user base. Even with over 2 million monthly active users and $13 billion in processed transactions at its peak, this traffic and trading volume failed to translate 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, formerly the cross-chain protocol Connext founded in 2017, later pivoted to a cross-chain settlement and clearing network. The project raised approximately $26.7 million from investors including Polychain Capital, Coinbase Ventures, and 1kx.

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

DL News

DL News launched in 2022, initially serving as the news arm of the DeFi data platform DefiLlama. It focused on independent reporting and investigative journalism, aiming to differentiate itself from traditional media's biases towards crypto and avoid the excessive promotion found in some industry media outlets.

After internal conflicts at DefiLlama in 2023, the two entities largely decoupled, and DL News lost its traffic support from DefiLlama. Simultaneously, overall traffic for crypto and tech media declined, with AI search and content aggregation further diverting website visitors. Although its research arm, DL Research, saw revenue grow by 270% in 2025, exceeding $1 million in annual sales, this was insufficient to sustain the entire media business, leading to its closure at the end of May.

Fantasy.top

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

Fantasy.top generated significant early revenue from NFT card trading, but the team realized trading volume couldn't sustain the game long-term. Subsequent attempts involving prediction markets, social data, and other gameplay mechanics failed to find a sustainable direction to consistently attract users and generate revenue. The team announced the end of operations in May and completed the shutdown by June.

Satori Finance

Satori Finance, launched in 2022, was a multi-chain perpetual DEX covering networks like Arbitrum, Base, and zkSync. The project raised $10 million in funding, led by Polychain Capital, with participation from Coinbase Ventures, Jump Crypto, and others. Its cumulative perpetual trading volume exceeded $134 billion.

Despite the massive trading volume, the platform's actual sustainable revenue was limited. In the first quarter of 2026, protocol revenue was approximately $580,000, which then decreased significantly. The team ultimately announced the cessation of operations, requiring users to close positions and withdraw assets by July 16th.

Yupp

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

As model capabilities rapidly improved and the industry's focus shifted from simple chatbots to Agents, the demand from model developers for large-scale crowdsourced evaluation data also changed. The team decided to cease further investment and return remaining funds to investors.

Legend

Legend was founded in 2024 by former Compound executives as a mobile DeFi Super App aimed at mainstream users, integrating yield, lending, and trading functionalities from protocols like Aave, Compound, and Uniswap into a single application. It raised $15 million in 2025 from a16z crypto and Coinbase Ventures.

Founder Jayson Hobby reflected that mainstream users aren't concerned with whether a product is "on-chain"; they care more about practical experiences like yield and transaction speed. Simply lowering the barrier to using DeFi wasn't enough to drive mass adoption. The team decided to stop development, and the application officially shut down on July 12th.

Entropy

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

After multiple pivots and two rounds of layoffs, Entropy shifted to a crypto automation platform in 2025, aiming to be a "Crypto version of Zapier/n8n." However, early market feedback indicated this model was unlikely to achieve the scale required by VCs. The founder chose to close the company rather than pivot again, returning remaining funds to investors.

Reason 2: Sector Cooling Down

These projects once capitalized on a hot narrative, but the actual market demand ultimately failed to reach initial expectations. As the sector cooled, their original growth logic became invalid.

NFTfi

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

As the NFT market continued to shrink, NFTfi's potential revenue became insufficient to cover its operational costs. While the team remained optimistic about the long-term value of NFTs, the uncertainty of market recovery and the inability to continue subsidizing operations led them to stop new loans. They plan to shut down the frontend by August 31st, while keeping the on-chain contracts active.

Parsec

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

Parsec's core demand once came from DeFi leveraged trading and the active NFT period, especially during cascading liquidations involving Terra and 3AC. However, after the FTX collapse, the structure of DeFi spot lending and leveraged trading changed significantly, original demand never recovered, and the NFT market continued to cool. Founder Will Sheehan admitted the team misjudged market directions multiple times, finally shutting down the platform in February and refunding remaining subscription fees.

MilkyWay

MilkyWay, launched in 2023, was initially the first liquid staking protocol on the Celestia ecosystem, later expanding to Initia, Babylon, and restaking services. Its TVL once reached $250 million. The project raised approximately $6 million in total funding, including a $5 million seed round led by Polychain Capital, with participation from Binance Labs, Hack VC, and others.

DeFi activity on Celestia didn't explode as the team expected, and restaking demand quickly faded. MilkyWay subsequently attempted pivoting to RWA and payment card services but failed to find a sustainable business direction. The team ultimately decided to permanently shut down the protocol.

Tally

Tally, founded in 2020, 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 in total, including an $8 million Series A in 2025 with participation from AppWorks, Blockchain Capital, and 1kx.

Tally had bet on a future with thousands of L2s and a multitude of DAOs. However, the industry concentrated on a few leading protocols, consumer-level on-chain applications didn't explode as expected, and the potential customer base for governance tools was far lower than anticipated. As the regulatory environment eased, the motivation for projects to use DAOs for decentralized governance further declined. Tally briefly considered an ICO for new growth but ultimately abandoned the token launch and announced its closure in March.

Botanix

Botanix, initiated in 2022, focused on a Bitcoin-based EVM-compatible Layer 2 called Spiderchain, 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 expected demand for Bitcoin DeFi. The team found that needs for lending, yield, and leverage were mostly met by WBTC and established L2s, giving users little incentive to migrate to a specialized Bitcoin L2. The fees generated by the network were insufficient to cover infrastructure costs. Furthermore, on-chain traffic increasingly consolidated on platforms with direct user interfaces like Hyperliquid and CEXs. Botanix announced the cessation of operations in June and entered a network wind-down process.

Colony

Colony, founded in 2021, was an ecosystem investment and acceleration platform focused on Avalanche, having raised approximately $19.5 million. Investors included Avalanche Foundation, HashKey Capital, Shima Capital, and GBV Capital, providing early-stage investment and liquidity support for Avalanche projects long-term.

As the number of new projects within the Avalanche ecosystem decreased and their quality declined, participation from external VCs also steadily dropped. A HyperSDK product developed over a year was shelved due to changes in Avalanche's technical roadmap. Subsequently, a key focus project, BTC.b, lost its foundation for implementation due to changes in asset management control. Following these two major setbacks, Colony announced the end of its five-year Avalanche ecosystem operations and stopped its application services in July.

Reason 3: Security Incidents

For these projects, it's no longer just about product-market fit. Hacker attacks, asset losses, liquidity crunches, and depleted runways ultimately stripped them of the ability to continue operations.

AscendEX

AscendEX, formerly 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, Alameda Research, and others.

AscendEX suffered a hot wallet attack in 2021, losing approximately $77.7 million, and promised full compensation to users. By the time of its closure this year, financial pressures resurfaced. A planned strategic transaction to replenish liquidity fell through, user withdrawals became restricted, and the platform eventually paused automatic withdrawals, unable to guarantee withdrawal times or amounts. The official announcement also cited MiCA compliance pressures and other financial/operational factors. AscendEX officially ceased operations on July 1st.

ZeroLend

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

In February 2025, a market on Base for ZeroLend's LBTC token was attacked. The attacker exploited a mechanism related to PT-LBTC, siphoning off approximately 3.92 LBTC. Affected users only received partial compensation by the time the project closed. Subsequently, ZeroLend faced liquidity crunches on early supporting chains like Manta, Zircuit, and XLayer, as well as discontinued oracle support. Combined with low lending business margins and high security costs, the protocol operated at a loss long-term, leading the team to decide to cease operations.

Ctrl Wallet

Ctrl Wallet, formerly XDEFI Wallet founded in 2020, was a self-custody wallet focusing on multi-chain asset management, swaps, and DApp interactions. The project raised approximately $26.6 million from Mechanism Capital, DeFiance Capital, and others.

On June 23rd of this year, Ctrl Wallet disclosed a security incident, stating that some Cardano wallets were compromised and related functionalities were suspended. The extent of the losses wasn't disclosed. The platform didn't fully recover, and about two weeks later, on July 7th, it announced a permanent shutdown, delisting from app stores and stopping major functions like transfers, swaps, and DApp interactions from August 3rd.

Syndicate

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

In April of this year, Syndicate's official cross-chain bridge, Commons, was attacked. The attacker drained and sold approximately 18.5 million SYND tokens, cashing out about $330,000, and Commons was subsequently shut down. A month later, Syndicate announced the end of its operations.

Reason 4: Abandoning the Original Technical Path

Some projects didn't face a sudden cash flow crisis but gradually lost their technological edge and relevance in the evolving industry. For these long-running projects, the final choice was to directly abandon their old paths.

Loopring

Loopring, founded in 2017, 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 of this year, Loopring officially shut down its DEX and sequencers went offline.

The team acknowledged that early zkRollups lacked virtual machines and composability, and the payment use case never achieved meaningful adoption. Its later zkEVM path was surpassed by newer, more compatible solutions. This was compounded by LRC being delisted from major exchanges in 2026, further shrinking its ecosystem. In 2024, Loopring also suffered an exploit of its Guardian service, resulting in the theft of approximately $5 million in assets, leading to the gradual withdrawal of its wallet and several DeFi products.

ICON

ICON launched in 2017 as an early representative L1 from South Korea, focusing on blockchain interoperability. The project raised approximately $43 million early on, with participation from Pantera Capital, Kenetic Capital, and others. After nearly nine years of operation, ICON's technology and community gradually migrated to the cross-chain DeFi infrastructure project SODAX.

As the industry's infrastructure matured, the team believed maintaining an independent Layer 1 would disperse capital and development resources. They thus chose to cease ICX incentives and concentrate resources on SODAX. ICON entered its economic closure phase in March and plans to permanently halt the network on December 31st.