August 9 — As of 2026, more than 100 crypto projects have shut down, filed for bankruptcy, or permanently ceased operations, with the pace of exits accelerating. In just one week in late July, BitMEX, BitMart, Movement Labs, and Storj Labs announced closures or filed related applications. The exiting projects span trading platforms, wallets, DeFi lending protocols, NFT marketplaces, and L1 blockchains; Polkadot parachain Moonbeam also permanently stopped operating on July 31, leaving user funds stranded for those who failed to bridge assets in time. This round of clearance has been described as a restructuring similar to the aftermath of the internet bubble burst. The number of general-purpose Ethereum L2s grew rapidly in 2023, but as the barrier to deploying chains lowered, the market became increasingly crowded and projects lacked differentiation. Espresso Systems CEO Ben Fisch said that it is general-purpose L2s, not all L2s, that are currently entering the consolidation phase. ARK Invest Research Director Lorenzo Valente stated that the crypto industry is undergoing the largest consolidation in its history, with capital becoming more selective and teams and trading platforms lacking real product-market fit shutting down; Hyperliquid and Pump.fun now account for 67% of total application-layer revenue. The problem with many projects is that they have usage but no revenue in the traditional sense. Many teams use their own tokens to pay engineers, subsidize liquidity, and cover security audit costs. In the recent bear market, most altcoins have fallen 70% to 90%, rendering token-denominated capital reserves and operating runway estimates invalid. DAO governance tool platform Tally once served over 500 protocols, processed over $1 billion in payments, and helped protect up to $80 billion in on-chain value, but still shut down due to the lack of a sustainable business model for governance tools. Security incidents have further accelerated project exits. Blockaid estimates that on-chain attack losses in the first half of 2026 reached $1.1 billion, surpassing the full year of 2025; among them, the Kelp DAO and Drift Protocol incidents each lost $293 million and $285 million, respectively. TRM Labs estimates that North Korea-linked attackers accounted for 66% of total crypto attack losses during the same period. Projects that continue to grow during the bear market generally rely on dollar-denominated revenue rather than their own tokens. Hyperliquid's cumulative fees surpassed $1 billion on June 30 and it now holds 70% of the decentralized perpetual contracts market; Aave held over $12 billion in deposits as of July, with annualized borrowing fees exceeding $100 million. The commonality among these projects is not the most complex technology, the most funding, or the largest community, but rather that they have built products users are willing to pay for.