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ETH 
LUNA The shutdown of encryption projects accelerates in 2026, and the Web3 project is the hardest hit.
The continued bear market has led to liquidity reconfiguration and a large number of user losses. In the first half of 2026, the shutdown of encryption projects accelerated, with dozens of shutdown incidents large and small throughout the year. These closures include projects that have been phased out due to insufficient users or bankruptcy, as well as projects that cannot recover funds and raise new liquidity after being hacked.
According to statistics, as of 2026, 17 well-known projects have been closed. These projects received a total of US$8.9 billion in public financing, but ultimately failed to have a substantial impact in the crypto economy.
Why is the shutdown of encryption projects accelerating?
The recent wave of project exits is similar to previous bear markets. Part of the shutdown in 2026 stems from market consolidation-a small number of flagship products have become major venues for activities, while smaller imitation projects or competitive platforms have difficulty proving their own value and attracting enough users.
In 2026, Web3 projects will also be hit by the slowdown in token trading, as users will shift liquidity to tokenized stocks or perpetual contract trading. The "appreciation of the currency" model of crypto start-ups in the first round of financing will no longer work in the bear market in 2026.
Web3 products have also failed to retain users after the airdrop phase. Some projects were closed after abandoning trends such as the NFT market, while others were still in insolvency despite the huge initial financing scale. At present, a few legacy ICO projects still hold large amounts of ETH reserves and gain passive benefits by acting as verifiers.
The scale of closures and bankruptcies this time even exceeds the wave of project closures in 2022. However, these closures did not have a ripple effect on the entire ecosystem as the FTX and Terra (LUNA) incidents did.
According to relevant reports, some of the shut down projects involve infrastructure and new chains that are almost unused. Bitmex, which recently announced its closure, was terminated due to its inability to find buyers and difficulty in continuing market operations. SecondFi apps were shut down after a high-profile wallet attack in June.
The wallet project is also gradually withdrawing: Magic Eden wallet was suspended in the first quarter, and CTRL wallet was in operation until August.
A total of 95 projects will be closed in 2026
According to statistics, as of 2026, a total of 95 projects will be closed. The latest projects to be shut include HaHa Wallet and zero-fee L2 chain Zero Network. Even promising chains such as Polygon ZK-EVM shut down after running for a period of time with few users.
These projects cover multiple areas and narratives, including DeFi, SocialFi, asset management, and stablecoin minting. The recent wave of closures also shows that only a few flagship projects can be accommodated in the encryption space.
Ecosystems that rely on continued financing and new project launches have also slowed down, such as the Celestia Ecosystem and some AI launch platforms. According to analysis, although some projects have good product fit with the market and sufficient users, they still cannot survive the bear market cycle.
Cryptocurrencies consistently maintain the highest failure rate of any entrepreneurial category, with up to 95% of projects failing. Research shows that the average duration of encryption projects is 2.3 years.
The recent wave of closures has also been seen as a sign that the bear market may bottom out. The wave of fast online and money-making and running is over, leaving only the most useful on-chain tools and practical application scenarios.
