2025 Crypto Death Project Review: Nearly $700 Million in Funding Accumulated, Former Star Projects Bid Farewell

Author: zhou, ChainCatcher

2025 is destined to be a year that crypto investors and practitioners will repeatedly ponder.

This year, the market accelerated the concentrated liquidation of financing illusions and narrative bubbles, shifting from a speculation-driven false prosperity to a stock-clearing based on effectiveness.

As the illusion of liquidity dissipates, once-spirited pioneers fall one after another, and the industry, in the painful process of dying and being reborn, forces every practitioner to re-examine the survival rules here.

2025 Project "Death" Portrait: From Narrative Clearance to Logical Judgment

On December 30, the RootData data platform updated a list of dead projects in the crypto industry for 2025. These projects have either announced their cessation of operations or bankruptcy, or have been deemed "dead" due to long-term website inaccessibility. The list is still being updated.

Source: RootData

Looking back at past data, in 2021, the market was still in the early stages of a bull market, with risks hidden and recorded 67 failure cases; then in 2022 and 2023, the number of bankrupt projects surged to 250 and 230 respectively due to the chain reactions triggered by black swan events like the collapse of FTX and Luna; in 2024, as the market gradually stabilized, the elimination rate fell to 171.

Unlike the passive deaths caused by explosions in the past, the current wave of bankruptcies points more towards the collapse of business logic under extreme pressure, highly concentrated in popular tracks heavily invested by capital.

Specifically, the GameFi sector is a hard-hit area, with a large number of projects including COMBO, Nyan Heroes, and Ember Sword shutting down one after another. The NFT sector is also in dire straits, with platforms like Royal, RECUR, and X2Y2, which were once highly focused, appearing on the list.

In addition, competition at the infrastructure level has become increasingly brutal. Projects like CLV and Vega Protocol exited due to weak ecosystems, while automated market maker Bunni, which suffered a fatal blow from hackers, reflects the devastating impact of missing security boundaries on protocol survival.

Besides the explicit death list, RootData's compilation of "zombie projects" has exposed hundreds of projects on the brink of death. Most of them were born at the turning point of the 2022-2023 cycle. Although they have not declared bankruptcy, the projects have fallen into inactivity, with no updates on product features or operational activities in recent years.

Among them are not few remnants of the metaverse and gaming narratives (Spatial, GameSwift, etc.), once-promising DeFi protocols (finance.vote, Set Protocol, AutoFarm, etc.), and infrastructure and developer platforms (Reach, Pinknode, Unlock Protocol, etc.).

Source: RootData

Evolution of Industry Underlying Logic: From Narrative Illusion to Value Reconstruction

The root cause of the wave of project bankruptcies in 2025 lies in the fundamental reversal of the underlying business logic in the industry.

Taking the GameFi sector as an example, Delphi Digital pointed out that in 2025, the industry performed extremely poorly, with financing amounts plummeting by more than 55% year-on-year. Some once highly anticipated star products performed mediocrely after launch, leading to a rapid freeze in market enthusiasm. Data shows that the GameFi market size shrank from $23.75 billion at the beginning of the year to $9.03 billion by the end of the year, a decline of over 60%.

This grim situation reveals the inherent fragility of the previously popular "Play-to-earn" model: without sustained external incremental funding, the high-inflation token economic model not only fails to sustain but accelerates user loss. Although many projects attempted to find a glimmer of hope by turning to Telegram mini-programs, the ecological break caused by stagnation in main chain business led to most user migrations ending in failure, with the entire sector's trading volume plummeting over 70%.

The collapse of the NFT market is even more alarming. Data shows that the NFT market fell to its annual low in December, with total valuation plummeting from $9.2 billion in January to $2.5 billion, a drop of 72%. Meanwhile, market activity showed a cliff-like shrinkage; according to CryptoSlam data, the number of sellers fell below 100,000 for the first time since April 2021.

The reason lies in the lack of practicality, which has become the fatal flaw of NFTs. According to Bloomberg, the elite group in the crypto circle has begun to restructure their asset allocation, choosing to shift their attention from digital art to more certain physical scarce assets.

In fact, the collapse of GameFi and NFTs did not happen overnight. Many GameFi projects showed signs in 2022, with user loss and inflation issues accelerating, while NFTs remained sluggish after liquidity in the secondary market dried up, now entering a phase of final clearance.

Moreover, the DeFi sector has not been spared, with the total locked value (TVL) dropping by over 20% throughout the year. On one hand, frequent and high-profile hacker attacks have shaken users' trust in protocol security boundaries; on the other hand, the exhaustion of yields under stock competition has accelerated the outflow of a large amount of "floating capital" chasing high interest.

Overall, the pains of 2025 prove that projects characterized by "low effort, high leverage" have lost their survival soil. The crypto market is undergoing a paradigm shift from speculation-driven to value-driven, and only entities with sustainable business models can stand firm in the new order.

Ineffectiveness of Capital Endorsement: Collective Fall of Star Projects

In the liquidation wave of 2025, high financing scales and top institutional endorsements failed to serve as a "safe haven" for projects.

Data shows that even targets once favored by top VCs like a16z, Pantera, and Polychain, when lacking real traction and self-sustaining capabilities, still cannot escape failure.

1. Discrepancy Between Vision and Reality: Liquidation of High Financing

Among the publicly listed dead projects, Vega Protocol, which ranks high in financing amounts, once garnered over $100 million in bets from 29 top capital firms, including Coinbase Ventures and Ripple, thanks to its vision of decentralized derivatives. However, its mainnet TVL remained at a few hundred thousand dollars for a long time, far behind competitors like Hyperliquid. Ultimately, under the dual pressure of weak user growth and resource depletion, the project was closed via community vote, shifting to software development.

2. NFT Bubble Burst: Chain Reaction Triggered by Liquidity Drought

The collective bankruptcy of the NFT sector shows clear signs of "narrative collapse." The music NFT platform Royal (which raised $71 million), despite having support from a16z and star endorsements, still faced a funding chain break due to a 66% drop in secondary market trading volume and an inability to break through mainstream bottlenecks in practicality. Similarly, RECUR, valued at over $300 million due to its brand IP (which raised $55 million), and the established platform MakersPlace (which raised $30 million), gradually exited the stage due to market saturation, revenue collapse, and a cliff-like drop in user engagement.

3. Sector Squeeze and Ecological Decline: The End of Technical Narrative

In the infrastructure sector, the rise and fall of ecosystems directly determine the life and death of projects. CLV (Clover Finance), after receiving $47.1 million in investments from OKX Ventures and Polychain, ultimately closed due to the decline of the Polkadot ecosystem, delisting from multiple exchanges, and liquidity drought. Fractal Network was forced to shut down under the pressure of monopolization in the ZK sector due to long technical landing cycles and low market adoption rates.

4. Structural Defects: From Metaverse Retreat to Protocol Security

Futureverse (which raised $54 million) entered liquidation under the dual blows of the metaverse retreat and insufficient revenue; COMBO (which raised $40 million) exhausted its funds due to the failure of the GameFi model and unsuccessful user migration. Additionally, the DeFi protocol DELV, once valued at over $300 million, ultimately chose to cease operations due to the high costs of fixing core vulnerabilities and a lack of market fit for its products.

These cases convey a clear signal: in the current conservative investment climate, financing scale and institutional halo are no longer talismans.

Projects lacking real user retention and sustainable business models, regardless of their high entry barriers, will quickly fall into the endgame of funding chain break once they lose external capital infusion.

Conclusion

Pain is an inevitable path to maturity. In the crypto world, high financing, star VCs, and popular sectors cannot guarantee survival.

In this painful process of dying and being reborn, the industry will ultimately understand: all revelries that deviate from business common sense must end with liquidation.

After all, there is no eternal winter or summer in crypto; surviving is the only narrative.

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