TL;DR
- In 2026, at least 17 relevant Web3 projects shut down their operations, accumulating $8.9 billion in funding that failed to generate impact in the industry.
- According to Rootdata, a total of 95 projects suspended their activities this year, spanning DeFi, NFTs, wallets, exchanges and layer-2 chains.
- The closures exceeded in volume the wave of shutdowns seen in 2022, though without the systemic effect generated by collapses such as FTX or Terra (LUNA).
The 2026 bear market deepened the pace of closures in the Web3 ecosystem at an alarming rate. According to data from Cryptorank, 17 relevant projects shut down their operations so far this year, having collectively raised $8.9 billion in funding without managing to consolidate a position in the crypto economy. In addition, Rootdata recorded a total of 95 closures spanning sectors as diverse as DeFi, SocialFi, asset management and stablecoin issuance.
The causes behind the closures vary. Some projects failed to recover after exploits that drained their treasuries. Others simply exhausted their user base once the initial airdrop phase concluded, without having built a sustainable model. There were also cases of insolvency despite having completed large funding rounds at early stages.
Crypto Shutdowns Are Accelerating in 2026
Since the beginning of the year, the market has already recorded 17 major shutdowns and bankruptcies.
Combined, the projects and companies on the list had raised at least $8.9B in disclosed funding before shutting down or filing for… pic.twitter.com/qxeWhh7M54
— CryptoRank.io (@CryptoRank_io) July 23, 2026
The Collapse of the Web3 Promise
The pattern repeats dynamics observed in previous bear market cycles, though with characteristics specific to this period. In 2026, liquidity migrated toward tokenized equities and perpetual futures trading, moving away from the traditional crypto startup model that promised token appreciation after the initial round. That formula stopped working in the current context.
The most notable Web3 project closures included the Magic Eden wallet, which ceased operations in the first quarter, and CTRL Wallet, active until August. BitMEX announced its closure after failing to find a viable buyer. SecondFi App suspended its activities following a high-profile exploit in June. Polygon ZK-EVM, a chain that once generated significant expectations, was also discontinued due to a scarcity of active users. HaHa Wallet and Zero Network, a zero-fee L2, rounded out the list of the most recent closures.
The Highest Failure Rate
An analysis by Gate Exchange noted that several Web3 projects had products and users, but were unable to sustain their operations throughout the bear market cycle. Cryptocurrencies historically record the highest failure rate among all startup categories, with up to 95% of projects failing to consolidate, and an average lifespan of 2.3 years.
The scale of Web3 project closures surpassed the 2022 wave, though without triggering systemic contagion like that caused by the collapses of FTX or Terra (LUNA). Some analysts read this peak in failures as a signal that the market is approaching its lowest point in the cycle.
