They're going out of business

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DefiLlama maintains a database of sunsetting projects: chains & protocols that announce a winding down of operations are added to the list. This analysis includes protocols that announced a winding down of operations in 2026 and does not include protocols that announced in 2025 and ceased operations in 2026.

With 100 projects announcing a shutdown this year, and 40 announcements in the last 90 days alone, we dug into the data behind the announcements.

The most common reason behind shutdown (many entities state more than one) is what you’d expect: No product-market fit.

Very few projects mentioned competitive pressure as their reason for sunsetting. Aside from a lack of PMF, most projects stated an exhaustion of runway, insufficient revenue, or pivoted to another product offering.

This shakeup is visible elsewhere: 87 M&A deals have been made YTD, which is already a 65% increase compared to last year.

The largest cohort of wind-downs by category was L1 & L2 chains.

While many protocols saw activity on multiple chains, Ethereum was the common denominator: most wind-downs happened on Ethereum.

Collectively, these projects raised ~$1b and generated $250m in lifetime fees.

9 projects raised more than $50m, and another 9 earned $5m in fees.

There was little correlation between money raised & success or longevity. The sample size is small, but raising more money shows at best a weak positive relationship with either outcome.

Of the 20 chains that announced shutdowns, only a few showed significant traction. The largest chain is Fantom, which raised $50m in 2018, ultimately reaching nearly $8b in TVL in 2022 and generating $36m in lifetime chain fees.

Fantom’s sunset can be classified as a strategic pivot to Sonic, but by the time the network migration was active, Fantom TVL & activity were well off the highs.

Secret Network had by far the largest fundraise of the sunsetted group, raising a $400m ecosystem-foundation round in early 2022.

Secret started as a privacy-focused Cosmos SKK L1. TVL peaked at just over $100m before the raise closed and is currently sitting at less than $1m.

Secret was hit by an exploit and a governance scandal: the Axelar-Secret IBC bridge was hacked for $4.7m, and the founder took an undisclosed “dividend” from foundation funds worth north of $2m.

Secret Network is not confirmed dead, but the original dev team (SCRT Labs) is exiting for certain on Sept 1, 2026. The chain itself may continue under community stewardship or fragment into a migrated Arbitrum-based SCRT token, depending on an active governance vote.

sUSD was Synthetix’s synthetic dollar minted by SNX stakers. Stakers took on a pooled, dynamic debt position and in exchange earned a share of trading fees + SNX inflation rewards.

sUSD's goal was ambitious: make sUSD the base liquidity/settlement layer for an entire onchain synthetic-asset trading platform (forex, commodities, indices, equities on the Synthetix Echange, which later became Kwenta) all without offchain collateral, positioning Synthetix as infrastructure for permissionless derivatives rather than "just another stablecoin".

But the shared debt-pool backing instead of 1:1 collateral design also removed the peg-arbitrage mechanics that fiat / overcollateralized stablecoins rely on, and rising competition without a native yield weakened its case for capital retention.

SIP-423 proposed by founder Kain Warwick wound down sUSD entirely, redeeming it for SNX at a 4:1 ratio with a lockup.

Synthetix’s TVL (staked SNX) peaked at nearly $3b in early 2021.

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Traders and analysts can now see how the firms behind a token's liquidity actually perform, from inside the platform they already use every day.

If RWA-first and Other-first wallets kept trading at the pace they arrived at, weekly active wallets should be climbing alongside the cumulative base. That's not what the data shows.

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