Even with tens of millions in funding, they couldn’t make it. Who has the crypto industry claimed this year?

Original by Odaily ( @OdailyChina )

Author: Asher ( @Asher_0210 )

Last weekend, the established crypto exchange BitMart suddenly announced it would be ceasing operations in an orderly manner, once again sparking discussions in the market about the survival conditions of crypto projects.

In fact, since the beginning of this year, the projects choosing to shut down are not limited to small and medium-sized ones. Among them are star projects that once raised tens of millions of dollars, had millions of users, and even briefly led their respective niche tracks.

From NFTs, DeFi, and Layer 2 to wallets, exchanges, and infrastructure, the reasons for these projects’ failures vary. Odaily has compiled a list of highly-funded, high-profile crypto projects that have announced closures this year, examining why these once-celebrated projects ultimately failed to survive.

Reason 1: Unsustainable Business Models

These projects did not lack users, transaction volume, or funding. In fact, many had impressive metrics at their peak. However, they ultimately failed to convert their scale into sufficient revenue to support 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, boasting over 2 million monthly active users at its peak and processing over $13 billion in cumulative transactions. 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 built its user base through asset tracking and transaction aggregation but later expanded into NFTs, on-chain social features, block explorers, and data APIs, never forming a stable revenue stream commensurate with its user scale. Even with over 2 million monthly active users and processing over $13 billion in transactions at its peak, this traffic and transaction volume failed to translate into sustainable commercial returns. After evaluating various options to continue operations, the team ultimately chose an orderly exit, planning to shut down its website, App, and API services on August 3rd.

Everclear

Everclear, previously known as the cross-chain protocol Connext founded in 2017, later pivoted to a cross-chain clearing and settlement 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 launch timelines for several signed major clients were slower than expected. The project’s funds were depleted before related partnerships could generate stable revenue, leading to the final decision to shut down both the protocol and the team.

DL News

DL News launched in 2022, initially serving as the news arm of the DeFi data platform DefiLlama, focusing on independent reporting and investigative journalism. It aimed to differentiate itself from traditional media’s bias against Crypto and avoid the overly promotional nature of some industry media outlets.

After internal conflicts at DefiLlama in 2023, the two entities parted ways, and DL News lost the traffic support from DefiLlama. Meanwhile, overall traffic for crypto and tech media declined, with AI search and content aggregators further siphoning website visits. Although its DL Research division saw a 270% revenue increase in 2025, surpassing $1 million in annual sales, it was still insufficient to sustain the entire media business, leading to its closure 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 the KOLs’ interaction data on X. The project raised a total of $4.25 million in a round led by Dragonfly, with participation from Manifold Ventures.

Fantasy.top initially generated substantial revenue from NFT card trading, but the team realized the trading volume could not sustain the game’s operations long-term. Subsequent attempts into prediction markets, social data, and other game mechanics failed to identify a sustainable direction to attract users and support revenue. The team announced the end of operations in May this year and completed the shutdown in June.

Satori Finance

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

Despite the massive cumulative trading volume, its actual sustainable revenue was limited. In Q1 2026, the protocol revenue was approximately $580,000, which then further contracted sharply. The team eventually announced the cessation of operations, requiring users to close positions and withdraw assets before 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 obtain preference data. The project completed a $33 million seed round led by a16z crypto.

As model capabilities rapidly improved, the industry’s focus shifted from simple chatbots to agents. The demand from model developers for crowd-sourced evaluation data also changed. The team ultimately decided to stop further investment and return the remaining funds to investors.

Legend

Founded in 2024 by several former Compound executives, Legend was positioned as a mobile-first DeFi Super App, integrating yield generation, lending, and trading functions from protocols like Aave, Compound, and Uniswap into a single application. In 2025, it completed a $15 million funding round from a16z crypto and Coinbase Ventures.

Founder Jayson Hobby reflected that mainstream users do not care whether a product is ‘on-chain’; they are more focused on actual experiences like yield and transaction speed. Simply lowering the barriers to DeFi use was not enough to drive mass adoption. The team ultimately decided to cease investment, and the application officially shut down on July 12th this year.

Entropy

Founded in 2021, Entropy initially worked on decentralized asset custody and threshold signature infrastructure before pivoting 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, Coinbase Ventures, and others.

After multiple pivots and two rounds of layoffs, Entropy pivoted to a crypto automation platform in 2025, aiming to be a ‘Crypto version of Zapier/n8n’. However, early market feedback indicated this model would struggle to reach the scale required by VCs. The founder, unwilling to pivot again, ultimately chose to shut down the company and return the remaining funds to investors.

Reason 2: Cooling Market Narrative

These projects once bet on a hot narrative, but the actual market demand never developed to the scale initially expected. As the hype around their sector faded, their original growth logic became invalid.

NFTfi

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

As the NFT market continued to shrink, NFTfi’s potential revenue could no longer cover the protocol’s operational costs. While the team remained optimistic about NFTs’ long-term value, the uncertainty around market recovery and their inability to continue subsidizing protocol operations long-term led them to stop new loans. They plan to shut down the front end by August 31st this year, while keeping the on-chain contracts intact.

Parsec

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

Parsec’s core demand came from DeFi leverage trading and the peak NFT period, especially during the cascade of collapses involving Terra and 3AC. However, after the FTX crash, DeFi spot lending and leverage trading structures changed significantly; the original demand never recovered, and the NFT market continued to cool. Founder Will Sheehan admitted the team repeatedly misjudged market directions, ultimately shutting down the platform in February this year and refunding remaining subscription fees.

MilkyWay

MilkyWay launched in 2023 as 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, including a $5 million seed round led by Polychain Capital with participation from Binance Labs, Hack VC, and others.

DeFi activity on Celestia did not explode as the team anticipated, and restaking demand quickly waned. MilkyWay subsequently tried pivoting 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 with participation from AppWorks, Blockchain Capital, and 1kx.

Tally initially bet on a future with thousands of L2s and a multitude of DAOs, but the industry ultimately consolidated around a few leading protocols. Consumer-focused on-chain applications also failed to materialize as expected, resulting in far fewer potential clients for governance tools than anticipated. As the regulatory environment eased, the incentive for projects to achieve decentralized governance through DAOs further diminished. Tally once planned an ICO to find new growth but ultimately abandoned the token launch and announced its closure in March this year.

Botanix

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

Botanix ultimately did not see the anticipated demand for Bitcoin DeFi. The team found that needs for lending, yield, and leverage were mostly met by WBTC and mature L2s; users lacked sufficient incentive to migrate to a specialized Bitcoin L2. The network’s transaction fees were also insufficient to cover infrastructure costs. Furthermore, on-chain traffic increasingly concentrated on platforms with direct user entry points like Hyperliquid and CEXs. Botanix announced the cessation of operations in June this year and initiated the network wind-down process.

Colony

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

As the number of new projects in the Avalanche ecosystem decreased and their quality declined, external VC participation also waned. A HyperSDK product developed over a year was shelved due to Avalanche’s change in technical roadmap. Subsequently, the key BTC.b project lost its foundation 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 problem went beyond product-market fit. Hacker attacks, asset losses, liquidity crunches, and depleted funding runways ultimately left them unable to sustain operations.

AscendEX

AscendEX, formerly known as BitMax, launched in 2018 as a centralized exchange offering spot, futures, and staking services. It completed a $50 million 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 to fully compensate users. By the time of its closure this year, financial pressures resurfaced again. A strategic transaction intended to replenish liquidity fell through, user withdrawals became restricted, and the platform eventually suspended automatic withdrawals, stating it could not guarantee withdrawal amounts or timelines. 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 as a DeFi lending protocol deployed on multiple chains including 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, the LBTC market on Base was attacked. The attacker exploited a mechanism related to PT-LBTC to drain approximately 3.92 LBTC. Affected users only received partial compensation by the time the project shut down. Subsequently, ZeroLend faced liquidity depletion and oracle support cessation on early supported chains like Manta, Zircuit, and XLayer. Combined with low lending business margins and high security costs, the protocol was persistently loss-making, leading the team to decide to cease operations.

Ctrl Wallet

Ctrl Wallet, formerly XDEFI Wallet, was founded in 2020 as a self-custody wallet for multi-chain asset management, swapping, 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 functions were suspended. The specific amount of losses was not disclosed. The platform did not fully recover. Just about two weeks later, on July 7th, it announced a permanent shutdown, was removed from app stores, and ceased major functions like transfers, swaps, and DApp interaction 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 in total, including a $20 million Series A round led by a16z in 2021, with participation from Coinbase Ventures, Electric Capital, and others.

In April this year, Syndicate’s official cross-chain bridge, Commons, was attacked. The attacker drained and sold approximately 18.5 million SYND tokens, netting around $330,000, after which Commons was shut down. One month later, Syndicate announced the end of its operations.

Reason 4: Abandoning the Original Technical Path

Some projects did not suddenly face a cash flow crisis. Instead, they gradually lost their technological edge and reason for existence amidst industry evolution. For these long-running older projects, the final choice was to simply abandon their original path.

Loopring

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

The team acknowledged that early zkRollups lacked virtual machines and composability, and the payment use case never saw substantial adoption. Its subsequent zkEVM path was later surpassed by newer, compatible solutions. Furthermore, the delisting of LRC by major exchanges in 2026 further contracted the ecosystem. In 2024, Loopring also suffered a security breach involving 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

ICON launched in 2017 as an early representative L1 from South Korea, focusing on blockchain interoperability. The project raised approximately $43 million in its early stages, with participation from Pantera Capital, Kenetic Capital, and others. After nearly 9 years of operation, ICON’s technology and community gradually migrated towards the cross-chain DeFi infrastructure project, SODAX.

With the maturation of industry infrastructure, the team believed that continuing to maintain an independent Layer 1 would dilute funds and development resources. Therefore, they chose to cease ICX incentives and concentrate resources on SODAX. ICON entered an economic shutdown phase in March this year and plans to permanently halt the network on December 31st.