Cryptocurrency: More than 100 projects will be closed in 2026, including established players

2026: More than 100 encryption projects have been closed, and the industry has accelerated its reshuffle

According to data, more than 100 encryption projects have announced closure, filed for bankruptcy or stopped operations in 2026. This wave has affected exchanges, wallets, DeFi, NFT and some blockchains. At the end of July, BitMEX, BitMart, Movement Labs and Storj Labs announced that they would close or file for bankruptcy within a week. Meanwhile, Moonbeam stopped producing blocks on July 31. This shows that the industry is entering an extensive and highly visible phase of integration.

Industry Overview

Data shows that more than 100 encryption projects have closed, ceased operations or filed for bankruptcy in 2026. The wave of closures has spread across multiple areas, including exchanges, DeFi, NFT, wallets and some blockchains. The proliferation of general-purpose Ethereum Layer 2 solutions is accelerating market integration. Hacking attacks and liquidity shortages have further weakened projects that rely mainly on tokens as a treasury. Projects that have withstood the market downturn are increasingly relying on products with actual usage and sustainable revenue, rather than just their tokens themselves.

The trend of crisis spreading across the ecosystem

This trend affects multiple types of participants, including exchanges, wallets, DeFi lending protocols, NFT markets and Layer 1 blockchains, suggests that it is not limited to specific areas of the ecosystem. This wave is affecting different types of projects and spreading across the industry. According to data, more than 100 encryption projects have closed, stopped operations or filed for bankruptcy in 2026.

At the end of July, four companies announced their closures or filed for bankruptcy within a week. BitMEX, BitMart, Movement Labs and Storj Labs are all included here. This series of announcements provides specific metrics and shows that difficulties are no longer limited to young projects that are still in the start-up stage.

Moonbeam embodies this evolution at the entire blockchain level. The Boka parallel chain permanently ceased operations on July 31. Users who fail to transfer assets in time will face the dilemma of not being able to withdraw assets. Although the contract is still there, the chain no longer generates blocks to support its normal use.

This situation raises a special problem for users and developers: A project can disappear as a company, but its code will not disappear immediately. Smart contracts can sometimes continue to run after a team disbands. This feature distinguishes decentralized infrastructure from traditional technology companies and creates new operational risks.

Ethereum Layer 2 enters integration phase

The Ethereum Layer 2 ecosystem focuses on a large part of the industry reorganization. These networks have experienced rapid growth due to technological advances in 2023, greatly reducing costs and facilitating the launch of new chains. The principle is to process the transaction, package it, and then send it back to the Ethereum main network.

However, the simplification of network start-up has also led to the proliferation of general-purpose solutions. The market now contains many solutions that provide similar functions, and this growth reduces differentiation between projects. Therefore, the question is no longer just technical, but whether the network can maintain actual usage.

Some people believe that the current stage is the integration of universal Layer 2 solutions. "There are so many Layer 2 solutions that frankly make no sense as a product because there is no reason to have so many different versions of the same thing. We are now at a stage of integrating these networks, rather than integrating the entire Layer 2 domain."

According to this view, the problem is not for all Layer 2, but mainly for projects that replicate similar products. This distinction helps understand why some infrastructure is still developing, while others have stopped operating.

Another view points out that this wave of closures reflects that the market is maturing: financing has become more difficult and investors have become more picky. "Each company closes for its own reasons and potential problems. The phenomenon we see is not inherent in the Layer 2 ecosystem. Markets and technologies are maturing, the pace of investment is much slower and more cautious, and only projects with a solid business model and clear problem-solving capabilities can survive."

In other words, investors now prefer projects that demonstrate viable business models and clear and identifiable utility at the expense of more speculative start-ups.

At the same time, some analysts reiterated their views on the consolidation of the crypto market, believing that the industry is currently experiencing the largest consolidation stage in its history, far deeper than previous bear markets. Capital has become more selective, and teams and trading platforms that lack real resources are shutting down.

Limitations of the crypto business model emerge

Some of the missing projects rely heavily on their own tokens to maintain operations. These assets are used to pay engineers, provide liquidity and fund audits. This mechanism will work as long as their dollar value remains sufficient. However, the sharp decline in altcoins has reduced the financial visibility of many projects.

Tally is a very convincing example. This governance tool platform serving the DAO has supported more than 500 protocols, including Uniswap, Arbitrum and ENS, processed more than $1 billion in payments and helped protect up to $80 billion in value. Despite such activity, the platform was announced to be closed due to the lack of a sufficiently sustainable business model.

Step Finance takes another trajectory. The Solana Ecosystem's portfolio tracking and analysis platform has received funding to develop products. However, in January, an executive's equipment suffered a phishing attack, resulting in the theft of 261,854 SOLs (approximately US$35 million). The platform closed in February after funding and acquisition attempts failed.

Everclear illustrates another issue related to business models. The monthly transaction volume of this cross-chain settlement agreement reached US$500 million. However, the segment of cross-chain solvers has never reached sufficient commercial depth. The company signed multiple cooperation agreements, but its financial resources were exhausted before full implementation.

These three cases have different situations, but they have one thing in common: product usage does not automatically guarantee sufficient revenue. Significant activity can coexist with fragile treasuries and limited financing. As a result, the market places more emphasis on the ability of projects to generate sustainable income.

Hacking increases pressure on fragile projects

Security adds significant limitations to this integration period. According to a report, in the first half of 2026, losses caused by on-chain exploits reached US$1.1 billion, which exceeded the loss record for the whole of 2025. The number of attacks in April also hit a record high.

Two incidents accounted for most of the losses. Kelp DAO was stolen for $293 million on April 18. Drift Protocol lost $285 million on April 1 in a social engineering attack that lasted for months. Attackers linked to North Korea allegedly targeted the platform without exploiting any smart contract code vulnerabilities.

It is estimated that North Korea-linked actors accounted for 66% of hack-related losses in the first half of the year. This proportion will be 64% in 2025, compared with less than 10% at the beginning of this decade. The increasing complexity of attack methods has increased the minimum cost required to protect protocols. Medium-sized projects often lack sufficient resources to cope with this pressure.

The way we respond to attacks has also changed. In the past, some communities could tap into their coffers to make up for losses. But in 2026, these token reserves have suffered bear market effects. Venture capital also slowed, while liquidity remained under pressure after leverage-related losses in October.

The combination of these factors has reduced the resilience of many projects after an accident. A hacking attack may thus become the last straw that breaks down the camel, rather than a temporary crisis. Security, treasury and financing channels are thus closely linked. For teams that are still active, these limitations reinforce the importance of building economic structures that can withstand shocks.

"Zombie Project" reveals another risk

The disappearance of a team does not necessarily mean the disappearance of an agreement. Smart contracts that have been deployed can continue to run without maintenance by the developer. This situation has created a category sometimes referred to as "zombie projects." Their code remains active, and the structures that can monitor or repair code no longer exist.

The Lazy Summer case shows the possible consequences. In July, a breach that resulted in $6 million in losses was directly related to Stream Finance. The agreement will cease operations in November 2025. Eight months later, unresolved code associated with this old infrastructure set the stage for the attack.

Moonbeam exacerbates this difficulty. After the blockchain was shut down on July 31, assets in certain DeFi protocols still locked on the chain became inaccessible. The contract is still there, but no team can step in to modify its functionality. Users must cope with an environment where there are no active operators but still exist.

Security researchers also pointed to limitations of the old audit report. These files are specific to specific versions of the code and for specific periods of time, so the security of the protocol cannot be guaranteed after code modifications or the team disappears. As projects accumulate, the number of active contracts without interfaces or maintenance may increase.

A business model that survives integration

The crypto industry is evolving towards more stringent business model screening. Those projects that maintain operations do not rely solely on their own tokens for their products and revenue. This evolution strengthens the importance of actual usage, revenue and sustainable operations, and may also accelerate industry consolidation.

Despite this wave of closures, some participants have maintained solid activity. Hyperliquid's cumulative fees as of June 30 have exceeded US$1 billion, and its trading volume is still growing in a declining market. The platform accounts for 70% of the decentralized perpetual contract market. Aave held more than $12 billion in deposits in July and incurred annualized borrowing fees of more than $100 million.

Ether.fi also demonstrates a more diverse model. Its debit card products linked to digital assets account for about half of total agreement revenue, and its transaction fees reached US$2.72 million in the second quarter of 2026, when the total lockdown value reached US$7.8 billion.

These examples reveal a common criterion for continuing to operate projects: they have products and revenue sources that do not rely solely on their own tokens. So integration does not mean the general demise of the industry, but rather reflects a stronger screening between projects: projects that can turn usage into sustainable economic activity and projects that fail to do so.

In the short term, the number of closed projects may continue to evolve as financing conditions, liquidity and security costs change. Projects that are still active must maintain their user base over the long term while ensuring adequate revenue. Although the team disappears, abandoned infrastructure may still exist in the blockchain. Therefore, the future will depend not only on the ability to continue to operate, but also on the actual use value of the product.