In 2026, more than 100 crypto projects have shut down, filed for bankruptcy, or ceased operations, according to RootData. This wave has affected exchanges, wallets, DeFi, NFTs, and some block
In 2026, more than 100 crypto projects have shut down, filed for bankruptcy, or ceased operations, according to RootData. This wave has affected exchanges, wallets, DeFi, NFTs, and some blockchains. In late July, BitMEX, BitMart, Movement Labs, and Storj Labs announced their closure or bankruptcy filings within a single week. Meanwhile, Moonbeam stopped producing blocks on July 31. The sector is therefore entering a broad and highly visible phase of consolidation.
The trend is affecting several categories of players, including exchanges, wallets, DeFi lending protocols, NFT marketplaces, and Layer 1 blockchains. It is therefore not limited to a specific segment of the ecosystem. The wave is now affecting different types of projects and spreading across the entire sector. According to RootData data, more than 100 crypto projects have already shut down, ceased operations, or filed for bankruptcy in 2026.
At the end of July, four companies announced their closure or bankruptcy filing during the same week. BitMEX, BitMart, Movement Labs, and Storj Labs are among the affected players. This succession of announcements provides a concrete measure of the movement. It also shows that the difficulties now go beyond young projects still in the launch phase.
Moonbeam illustrates this evolution on the scale of an entire blockchain. This Polkadot parachain permanently ceased its activities on July 31. Users who had not transferred their assets in time are left without a solution. The contracts remain present, but the chain no longer produces blocks to allow their normal use.
This situation poses a particular question to users and developers. A project can disappear as a company without its code disappearing immediately. Smart contracts sometimes continue to function after the teams dissolve. This peculiarity distinguishes decentralized infrastructures from traditional tech companies and creates new operational risks.
Start your crypto adventure safely with KrakenThis link uses an affiliate program.The Ethereum layer 2 ecosystem concentrates a significant part of this restructuring. These networks experienced rapid growth in 2023 due to technical advances. They have strongly reduced costs and facilitated the launch of new chains. Their principle is to process transactions, group them, and then send them back to Ethereum.
However, the simplification of network launches has also multiplied generalist offers. The market now includes many solutions that offer similar functions. This multiplication has reduced differentiation between some projects. The question is therefore no longer just about technology, but about a network’s ability to maintain real usage.
In a statement attributed to CoinDesk, Ben Fisch, CEO of Espresso Systems, describes this period as a consolidation of generalist layer 2 solutions.
There were far too many layer 2 solutions, which, frankly, makes no sense as a product, because there is no reason to have so many versions of the same thing. We are now in a phase of consolidating these networks, not layer 2 as a whole.
Ben Fisch, CEO of Espresso Systems.
According to him, the problem does not concern all layer 2s but mainly projects that replicate a similar offering. This distinction helps understand why some infrastructures continue to develop while others cease their activities.
On his side, Orkun Mahir Kılıç, co-founder and CEO of Chainway Labs, which develops Citrea, the layer 2 Bitcoin platform, told CoinDesk that this wave of closures reflects market maturity where raising capital is more difficult and investors become more selective.
Every company has its own reasons and underlying issues to close its doors. The phenomenon we are seeing is not an inherent problem of the layer 2 ecosystem. The market and technology are maturing, investments are much slower and more cautious, and only projects with solid business models and clearly defined problems will survive.
Orkun Mahir Kılıç, co-founder and CEO of Chainway Labs
In other words, investors now favor projects capable of demonstrating a viable business model and clearly identifiable utility, at the expense of more speculative initiatives.
For his part, Lorenzo Valente, research director at Ark Invest, reaffirmed his analysis of crypto market consolidation by estimating that the sector is currently going through the largest consolidation phase in its history, much deeper than previous bear markets. According to him, capital has become much more selective, and teams and exchange platforms without real real estate investment trust (REIT) resources are shutting down.
Some disappeared projects heavily depended on their own token to finance operations. These assets were used to pay engineers, support liquidity, and finance audits. As long as their dollar value remained sufficient, this mechanism could work. However, the sharp decline of altcoins has reduced the financial visibility of many projects.
Tally provides a particularly telling example. This governance tools platform for DAOs supported more than 500 protocols, including Uniswap, Arbitrum, and ENS. It had processed over a billion dollars in payments and helped secure up to 80 billion dollars in value. Despite this activity, the platform announced its closure due to lack of a sufficiently sustainable model.
Step Finance followed a different trajectory. This Solana portfolio tracking and analysis platform had obtained funding to develop its product. In January, a phishing attack on an executive’s device allowed the theft of 261,854 SOL, about 35 million dollars. After failed funding and acquisition attempts, the platform closed in February.
Everclear shows another problem related to the business model. The cross-chain settlement protocol had reached 500 million dollars in monthly volume. Yet the cross-chain solver segment never reached sufficient commercial depth. The company had signed several partnerships, but its financial resources ran out before full implementation.
These three cases present different situations but share a common point. Product usage does not automatically guarantee sufficient revenues. Significant activity can coexist with a fragile treasury and limited funding. The market thus gives more importance to a project’s ability to generate sustainable revenues.
Security adds a major constraint to this consolidation period. According to a Blockaid report, on-chain exploits caused 1.1 billion dollars in losses in the first half of 2026. This amount exceeds losses recorded for the entire year of 2025. April also set a historical record for the number of attacks according to CROWDFUND INSIDER.
Two operations accounted for a large part of the losses. Kelp DAO suffered a theft of 293 million dollars on April 18. Drift Protocol lost 285 million dollars on April 1 after a social engineering operation conducted over several months. Attackers affiliated with North Korea are said to have targeted the platform without exploiting any smart contract code line.
TRM Labs estimates that actors linked to North Korea account for 66% of hack-related losses in the first half. This proportion reached 64% in 2025, compared to less than 10% at the beginning of the decade. Increasing sophistication of operations thus raises the minimum cost needed to protect protocols. Medium-sized projects sometimes have fewer resources to absorb this pressure.
The response to attacks has also changed. Previously, some communities could mobilize their treasuries to cover losses. In 2026, these token reserves have already suffered from the bear market effects. Venture capital investments have also slowed, while liquidity remains under pressure after losses related to leverage effects in October.
This combination reduces many projects’ capacity to bounce back after an incident. A hack can then become a definitive event rather than a temporary crisis. Security, treasury, and financing access thus become closely linked. For still active teams, these constraints reinforce the importance of an economic structure capable of withstanding shocks.
The disappearance of a team does not necessarily mean the disappearance of a protocol. Already deployed smart contracts can continue to operate without developers maintaining them. This situation creates a category of projects sometimes described as “zombies.” Their code remains active, while the structure able to monitor or fix it no longer exists.
The Lazy Summer case shows possible consequences. In July, a flaw causing 6 million dollars in losses was directly linked to Stream Finance. This protocol had already ceased operations in November 2025. Eight months later, unresolved code related to this old infrastructure contributed to creating an attack vector.
Moonbeam exacerbates this difficulty. After the blockchain shutdown on July 31, assets still locked in some DeFi protocols deployed on the chain become inaccessible. The contracts still exist, but no team can intervene to modify their functioning. Users must therefore cope with an environment that continues to exist without an active operator.
Security researchers also highlight the limits of old audits. These documents concern specific versions of code and set periods. They thus do not guarantee protocol security after modification or team disappearance. As projects accumulate, the number of active contracts without interface or maintenance may increase.
Crypto is evolving towards a stricter selection of business models. Projects that continue their activity have used products and revenues that do not rely solely on their own token. This evolution strengthens the importance of real usage, revenues, and the ability to sustainably finance operations. It could also accelerate sector consolidation.
Despite this wave of closures, some players still maintain solid activity. Hyperliquid surpassed one billion dollars in cumulative fees as of June 30. Its trading volume increased despite the market decline, while the platform represents 70% of the decentralized perpetual contracts market. Aave held more than 12 billion dollars in deposits in July and generated more than 100 million dollars in annualized borrowing fees.
Ether.fi also presents a more diversified model. Its debit card product linked to digital assets accounts for about half of the protocol’s revenues. Its transaction fees reached 2.72 million dollars in the second quarter of 2026. The total value locked then reached 7.8 billion dollars.
These examples reveal a common criterion among projects that continue their activity. They have used products and revenue sources that do not rely solely on their own token. Consolidation thus does not mean a general disappearance of the sector. It rather translates a stronger selection between projects capable of transforming their usage into sustainable economic activity and those that fail to do so.
In the short term, the number of closures could continue to evolve with financing conditions, liquidity, and security costs. Still active projects will have to maintain their users sustainably while ensuring sufficient revenues. Abandoned infrastructures could remain present in blockchains despite the disappearance of their teams. The future will therefore depend as much on the capacity to finance operations as on the real use of products.
