BlockBeats reported on August 5th that, as the cryptocurrency market enters the second half of the bear market, a significant industry shakeout has occurred. Today, Shaw Walters, founder of ElizaOS (formerly ai16z), announced that the ai16z/ElizaOS tokens are "completely dead," and the related foundation will gradually cease operations. This is another significant exit event following the shutdown of over 60 well-known crypto projects in the first half of the year.
According to statistics, in 2026, more than 60 well-known crypto projects, public chains/Layer2, DeFi protocols, wallets, NFT platforms and DAO tools announced the cessation of operations or filed for bankruptcy, with the pace of shutdowns accelerating significantly in late July.
This wave of exits has affected almost all sectors. In centralized trading platforms (PT1), derivatives pioneer BitMEX announced on July 23 that it would officially close on September 23, ending 11 years of operation; AscendEX ceased trading on July 1 due to its failure to obtain an EU MiCA license; and BitMart initiated a phased shutdown. In Layer 1/Layer 2 and infrastructure, Polygon zkEVM, Botanix, Sophon, Powerloom, MilkyWay, and others have successively ceased operations. In the DeFi sector, Radiant Capital, Step Finance (after suffering a hacking attack of approximately $40 million), Ionic Protocol, and Everclear have exited due to security incidents or liquidity shortages. In the wallet sector, Secondfi, Ctrl Wallet, and Leap Wallet have closed due to security vulnerabilities or strategic adjustments. NFT, gaming, and utility projects such as Foundation, Fishing Frenzy, Tally, and Zapper have also not been spared.
The main reasons are concentrated in three points: the business model failed to generate sustainable revenue (even though some projects had high monthly active users or transaction volume), the cooling of the sector's popularity led to the outflow of users and funds, and hacker attacks directly cut off the funding chain. Many projects had received millions to tens of millions of dollars in funding, but after the market pullback, they could not prove the product's market fit. Unlike the leveraged collapse of 2022, this round is more about "starving to death"—an orderly or forced exit after the funds ran out.