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-prominent pioneers fall one after another, and the industry, in its painful rebirth, forces every practitioner to re-examine the survival rules here.

2025 Project "Death" Portrait: From Narrative Liquidation 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 the 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 67 failure cases recorded. Subsequently, in 2022 and 2023, the number of bankrupt projects surged to 250 and 230 respectively, triggered by black swan events such as 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 that were 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 similarly devastated, with platforms once highly focused, such as Royal, RECUR, and X2Y2, all 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 fatal blows from hackers, reflects the devastating impact of missing security boundaries on protocol survival.

In addition to 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 (such as Spatial and GameSwift), once-promising DeFi protocols (such as finance.vote, Set Protocol, and AutoFarm), and infrastructure and developer platforms (such as Reach, Pinknode, and Unlock Protocol).

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 points out that the industry is performing extremely poorly in 2025, with financing amounts plummeting by more than 55% year-on-year. Some once highly anticipated star products have performed mediocrely after launch, leading to a rapid freeze of 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 once-popular "Play-to-earn" model: without a continuous influx of external incremental funds, a high-inflation token economic model not only fails to sustain but accelerates user attrition. Although many projects attempted to seek a glimmer of hope by turning to Telegram mini-programs, the ecological fracture 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 hit its annual low in December, with total valuation plummeting from $9.2 billion in January to $2.5 billion, a staggering decline 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, elite groups in the crypto circle have begun to restructure their asset allocations, choosing to shift their attention from digital art to more certain physical scarce assets.

In fact, the downfall of GameFi and NFTs did not happen overnight. Many GameFi projects showed signs of trouble in 2022, with user attrition and inflation issues accelerating, while NFTs continued to languish after liquidity in the secondary market dried up, now entering a phase of final liquidation.

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

Overall, the pain of 2025 proves 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; 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 have failed to serve as a "safe haven" for projects.

Data shows that even projects once favored by top VCs like a16z, Pantera, and Polychain, struggle to escape defeat in the absence of real traction and self-sustaining capabilities.

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 has long remained at the level of hundreds of thousands of dollars, far less than competitors like Hyperliquid. Ultimately, under the dual pressure of weak user growth and resource depletion, the project was closed through community voting, shifting to software development.

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

The collective collapse of the NFT sector exhibits clear characteristics of "narrative collapse." The music NFT platform Royal (which raised $71 million), despite having the support and star endorsement of a16z, 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 and raised $55 million) and the established platform MakersPlace (raised $30 million) gradually exited the stage due to market saturation, revenue collapse, and a cliff-like drop in user participation.

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

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

4. Structural Defects: From Metaverse Retreat to Protocol Security

Futureverse (raised $54 million) entered liquidation under the dual blows of the metaverse retreat and insufficient revenue; COMBO (raised $40 million) exhausted 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 climate of conservative investment attitudes, 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 breakage 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 rebirth, the industry will ultimately understand: all revelries that deviate from business common sense must eventually end in liquidation.

After all, there are no eternal winters or summers in crypto; surviving is the only narrative.

Click to learn about job openings at ChainCatcher