More than 100 crypto projects have shut down, filed for bankruptcy, or permanently ceased operations so far in 2026, according to Odaily, which cited CoinDesk. The pace of exits is still rising.
In just one week in late July, BitMEX, BitMart, Movement Labs, and Storj Labs announced closures or made related filings. The projects leaving the market span trading platforms, wallets, DeFi lending protocols, NFT marketplaces, and layer-1 blockchains.
Shutdowns are spreading across sectors
One example in the report was Moonbeam, a Polkadot parachain that permanently stopped operating on July 31. Users who did not bridge their assets in time were left with funds stuck.
The number of general-purpose Ethereum layer-2 networks grew quickly in 2023. As the barrier to launching chains fell, the market became crowded, and some projects lacked differentiation.
Many projects had users but not revenue in the conventional sense. Some teams were paying engineers with their own tokens, subsidizing liquidity, and covering security audit costs at the same time.
Token declines and weak business models are both taking a toll
Recent drops of 70% to 90% across many altcoins have thrown off treasury planning and runway estimates for teams holding reserves denominated in their own tokens.
The DAO governance tooling platform Tally had served more than 500 protocols, processed over $1 billion in payments, and helped protect as much as $80 billion in on-chain value. It still shut down because governance tooling lacked a sustainable business model, the report said.
Security incidents are accelerating the shakeout
Security breaches have also pushed projects closer to the exit. Blockaid estimated that on-chain attacks caused $1.1 billion in losses in the first half of 2026, more than the total recorded in all of 2025.
Within that figure, losses tied to Kelp DAO and Drift Protocol were put at $293 million and $285 million, respectively. TRM Labs estimated that North Korea-linked attackers accounted for 66% of total crypto attack losses over the same period.
Projects still expanding are leaning on dollar revenue
Projects that have kept growing through the bear market generally rely on dollar-based revenue rather than their own tokens, according to the report.
Hyperliquid had generated more than $1 billion in cumulative fees by June 30 and now accounts for 70% of the decentralized perpetuals market. Aave held more than $12 billion in deposits as of July, with annualized borrowing fees above $100 million.
Lorenzo Valente, director of research at ARK Invest, said the crypto industry is going through the largest consolidation in its history, with capital becoming more selective and teams and trading platforms without real product-market fit shutting down.