The crypto market has faced a new wave of project closures. This time, it’s not just about hacks or sudden bankruptcies, as it was in previous cycles. Now, many companies are gradually losing users, funding, and liquidity, after which they quietly exit the market.
One of the latest examples is the decentralized mail service Dmail, which announced its closure due to high infrastructure costs, problems attracting investment, and weak demand for its own token.
Old Funding Models Stop Working
During previous bull cycles, crypto projects could relatively easily extend their lifespans by issuing new tokens or another venture round. Now the situation has changed. Investors have become more cautious, liquidity has decreased, and the market is no longer willing to endlessly fund projects without clear revenue and a sustainable economy.
Echo Base head Roshan Dharia noted that previously, projects could cover financial holes through new token issuances or fund support, but now this path is essentially closed. Because of this, problems began to appear much earlier. In practice, this leads to the gradual fading of projects instead of loud collapses.
Crypto Companies Begin to Die Slowly
Unlike the 2022 crisis, the current market looks different. Many projects do not collapse in a single day. They gradually lose their audience, cut teams, reduce expenses, and try to find new funding while the token’s capitalization continues to fall.
This is exactly what happened with the Tally platform, which worked on DAO tools. The team admitted that the DAO governance market never reached the scale developers had hoped for. As a result, the project began the process of shutting down.
A similar situation arose with Step Finance. After a $40 million hack, the project tried to attract funding or find a buyer, but was unable to do so.
The Main Problem Is the Lack of a Bankruptcy Mechanism for Crypto
One of the industry’s key weaknesses is that crypto projects still do not have a proper restructuring system. Traditional companies have clear bankruptcy procedures, creditor negotiations, and asset protection. In crypto, such infrastructure is almost nonexistent.
Most projects operate through a mix of funds, DAOs, offshore structures, and tokenized communities. As a result, no one fully understands who actually has rights to the project’s assets in a crisis situation. This makes full recovery extremely difficult.
Token Holders Control Almost Nothing
During market growth, investors often perceived tokens as an analog of a stake in the project. However, in a crisis situation, it turned out that token holders usually have neither legal rights nor a mechanism to influence the fate of the company.
Dharia noted that the previous idea of ‘unity of interests’ between users, investors, and the team turned out to be very fragile, especially in a falling market and lack of liquidity. Because of this, projects end up trapped: attracting new money is difficult, and reaching a proper agreement with all parties is almost impossible.
Some Projects Begin to Move Away From the DAO Model
Amid the crisis, some teams have already started to reconsider the very structure of crypto projects. For example, Across Protocol proposed a token buyback option with a transition to a more classic corporate model.
The Risk Labs team admitted that the DAO and token structure hinders work with institutional clients and corporate partners. This is an important signal for the market. Many projects are beginning to realize that a fully decentralized model is far from always suitable for long-term business.
The Market Is Gradually Cleansing
Despite the negative backdrop, some analysts consider the current process a natural stage in the industry’s maturation. During the last cycle, a huge number of projects existed solely due to token growth and a constant influx of speculative capital.
When the market slowed down, it turned out that many companies did not have a sustainable business model. Now the sector is going through a painful selection stage, where only projects with real infrastructure, users, and sources of revenue begin to survive.
Pressure Increases on the Venture Market
At the same time, the behavior of crypto funds is also changing. Venture investors have become much more cautious about funding startups without a clear economy. An additional problem remains the weak liquidity of the secondary market and declining interest in new tokens.
Many funds now prefer infrastructure projects, stablecoins, asset tokenization, and AI directions instead of classic DAOs or DeFi experiments. For old crypto projects, this creates additional pressure.
What’s Next?
The new wave of closures shows that the crypto market is gradually emerging from the era of endless token-driven growth. The industry is beginning to face the same problems as traditional business: lack of revenue, difficulties with funding, and the need to build a sustainable operating model.
At the same time, the crypto market still does not have a full-fledged restructuring and investor protection system. That is why many projects are not going through classic recovery, but are simply slowly disappearing from the market.
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