Crypto infrastructure collapse: Secondary network shutdown, stablecoin decoupling and governance ale

The era of independent infrastructure is coming to an end?

The era of every project running its own chain is rapidly fading. Within a week, multiple agreements signaled that the cost of maintaining independent infrastructure was no longer cost-effective. A ZK Layer 2 that raised $60 million announced the closure of its blockchain;Berachain rewritten its core incentive layer through a hard fork; and Kraken incubated Ink outsourced chain operations to Optimism. At the same time, two overcollateralized stablecoins are trading at prices well below their U.S. dollar anchors; a Tornado Cash DAO proposal has triggered alarms over a possible $23 million governance breach; and Polymarket\'s internal cash tokens expose extreme wealth concentrations. These events paint a picture of projects calmly cutting costs, phasing out tokens, and refocusing applications rather than infrastructure-a shift that could reshape the way value flows across ecosystems.

The end of independent infrastructure?

Sophon\'s announcement was the most eye-catching. The ZK-powered Layer 2, which received $60 million in financing, now tells users it will close its native chain and migrate to Base under the new brand SOPH. Sophon bluntly said the era of cryptographic infrastructure is over and pointed out that millions of dollars in annual maintenance costs have not generated enough value. It plans to launch Pyre, an \"entertainment finance\" payment app with gamified features, in early July. The decision reflects a broader consideration: starting a chain is cheap, but maintaining its security, liquidity and connectivity to users is a continuing cost that few projects can cover.

Ethereum Layer 2-Ink, incubated by Kraken, chose a different path. It signed a long-term agreement to hand over all operations to Optimism\'s fully managed service, OP Enterprise. Optimism will be responsible for Ink\'s production environment infrastructure, while the Ink Foundation focuses on ecological expansion and new financial products. The deal is one of the early examples of mainstream Layer 2 outsourcing its technology stack to a hosting manager. Ink\'s roadmap still targets radical technical goals-programmable block construction, a one-day withdrawal window, 400 megabits of gas throughput per second, and a 100-millisecond withdrawal time by the end of 2026-but the heavy work is now carried out by Optimism\'s operations team.

Berachain\'s July 8 hard fork marks another kind of pullback: a reset of the token model. The proof of liquidity governance token BGT will be completely abandoned, BERA will become the main economic unit, and sWBERA will serve as the value accumulation layer. Emissions will no longer be done through Boost voting. Instead, agreements must demonstrate real on-chain revenue and practicality to qualify for emissions under the new emission routing mechanism ERA. This is a thoughtful shift from the era of liquidity mining to a model that links incentives to actual product use, a theme that is spreading across the industry.

Stability coins are under pressure

Stabiloin markets are rarely calm, and this week is no exception. Abracadabra Money\'s MIM fell to about $0.53, down 33% in 24 hours. For an overcollateralized stablecoin, this is a serious unanchor. The team responded that emergency borrowing rates were raised in all Cauldron markets, hoping that discounts would attract borrowers to buy MIM at low prices and repay debt, thereby reducing supply. Curve bribes and direct liquidity incentives were suspended until anchoring was restored. In theory, this mechanism may work, but given that the tokens are so far away from the dollar target, the market is watching to see whether the forced contraction can happen quickly enough without triggering a chain of liquidations.

Synthetix proposed SIP-423, a governance proposal to completely withdraw from sUSD. The stablecoin is trading at approximately US$0.25, which is only a fraction of the scheduled US$1 anchor. According to the plan, sUSD holders will receive 4 SNXs for every sUSD, but the compensation will need to be locked for one year and released linearly in the second year. The proposal, supported by founder Kain Warwick, amounts to an admission that the anchoring mechanism cannot be repaired. This also forces users to make the choice: accept the exchange and wait, or hold severely damaged assets. The closure of its native stablecoin marks the end of an important chapter for an agreement that once supported a large number of on-chain synthetic asset transactions.

Stabiloin pressure is not an isolated phenomenon. In the broader tokenized asset market, capital continues to flow to products with clearer institutional support and regulatory paths, abandoning experimental designs that once thrived in a zero-interest-rate DeFi environment. The difference between MIM and sUSD and the safer dollar-anchored assets is the vulnerability of their collateral and redemption mechanisms under stressful conditions.

Governance and Concentration Risk

Lido\'s governance vote to revoke official recognition of wstETH bridging endpoints on nine networks, including zkSync Era, Scroll, Mantle and Polygon PoS, was a low-key but indicative resource adjustment. The DAO will no longer proactively monitor or support these deployments. Bridging contracts are still open and tokens are still valid, but the signal is clear: Lido is narrowing its attention to chains where liquidity needs to pledge ETH are sufficient to cover costs. This retreat could affect developer activity along these chains, as pledged ETH becomes less liquid and becomes less interoperable with re-pledge and lending agreements.

A more immediate threat appears on Tornado Cash DAO. Researchers at L2BEAT have flagged a malicious governance proposal that contains an unverified target contract with complex decompile logic. If the proposal passes, delegatecall could endanger the DAO and its $23 million TORN token. The sponsors received the funds four days ago through a privacy protection agreement Railgun, which concealed the source of the funds. Core Tornado Cash agreement funding was unaffected, but the incident was a reminder that when voting participation is low and proposal review is lax, the DAO treasury remains a soft target.

Polymarket\'s total supply of on-chain cash balance tokens pUSD now exceeds US$500 million, distributed among more than 1 million addresses, but the distribution is extremely uneven. Only 567 addresses (0.06% of total holders) control 55.34% of supply. Addresses holding more than 1000 pUSD account for 2.76% of the total number of holders, but have a share of 90.34%. Half of the addresses hold less than 10 pUSD. Some of the differences reflect the capital spent to open forecast positions, but still highlight the concentration of forecast market liquidity in the hands of a few large traders. Weak participation at the retail level is a structural risk for platforms that rely on deeply diversified pools of funds to generate accurate market signals.

BitGo announced that it would lay off nearly 15% of its workforce and focus on stablecoins, trading, security, clearing and AI infrastructure, ending this week\'s integration theme. The custodian company has not exited the crypto space, but has instead cut back on non-core businesses amid a tightening financial services environment. Whether this heralds a broader wave of cost-cutting across the industry or is just an isolated strategic shift remains to be seen, but the direction is the same: attention is shifting from building infrastructure for its sake to products that generate sustainable income.