Over 100 crypto projects have been shut down in 2026, and the industry is experiencing an internet bubble reshuffle

According to Twitter, more than 100 crypto projects have closed, filed for bankruptcy, or permanently ceased operations since 2026, and the pace of withdrawal is accelerating. In late July alone, BitMEX, BitMart, Movement Labs, and Storj Labs announced closures or submitted related applications. The exit project covered trading platforms, wallets, DeFi lending agreements, the NFT marketplace, and the L1 blockchain; Polka's parallel chain Moonbeam also permanently ceased operation on July 31, and user funds that were not bridged in time were stranded.

This round of clean-up has been described as similar to the restructuring of the industry after the bursting of the internet bubble. The number of Ethereum's general-purpose L2 grew rapidly in 2023, but as the threshold for the deployment chain was lowered, the market became congested and projects lacked differentiation. Espresso Systems CEO Ben Fisch said that the current integration phase is a general-purpose L2, not all L2s. Lorenzo Valente, research director at ARK Invest, said that the crypto industry is undergoing the largest consolidation in history, capital is becoming more picky, and teams and trading platforms that lack a fit for the actual product market are being shut down; Hyperliquid and Pump.fun already account for 67% of the total revenue of the application layer.

The problem with a large number of projects is that they have usage but no revenue in the traditional sense of the word. Many teams use their own tokens to pay engineers, subsidize liquidity, and cover security audits. Recently, most altcoins in the bear market have fallen by 70% to 90%, making token-denominated capital reserves and operating cycle estimates invalid. DAO governance tool platform Tally, which served more than 500 agreements, processed over $1 billion in payments, and helped protect up to $80 billion in on-chain value, was shut down due to the lack of a sustainable business model for governance tools. The security incident further hastened the exit of the project. Blockaid estimates that on-chain attacks lost $1.1 billion in the first half of 2026, more than the full year of 2025; Kelp DAO and Drift Protocol incidents lost $293 million and $285 million, respectively. TRM Labs estimates that North Korea-related attackers accounted for 66% of total crypto attack losses over the same period.

Projects that can continue to grow in a bear market generally rely on dollar revenue rather than their own tokens. Hyperliquid's cumulative processing fees exceeded 1 billion US dollars on June 30, and currently accounts for 70% of the decentralized perpetual contract market; as of July, Aave held more than 12 billion US dollars in deposits, and annual loan fees exceeded 100 million US dollars. What these projects have in common is not the most complex technology, the most financing, or the largest community, but rather the establishment of products that users are willing to pay for.

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