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Crypto shakeout kills over 100 projects, Ethereum L2s shrink

Altcoin prices have fallen 70% to 90%, and RootData says more than 100 projects shut down, filed for bankruptcy or went dark in 2026.

Reported · Written up by our desk · Market Structure

CoinDesk reports crypto is entering a dot-com style shakeout that is purging overcrowded parts of the industry, including layer-2 networks and protocol tooling, as token prices and startup funding deteriorate. The outlet says altcoin prices have dropped 70% to 90%, draining token-denominated startup treasuries.

The report points to mounting security losses and reduced investor rescue capacity, citing more than $1.1 billion lost to exploits in the first half of 2026. It says single hacks have led to immediate protocol bankruptcies, leaving unmaintained “zombie contracts” running on-chain.

According to RootData data cited by CoinDesk, over 100 crypto projects have shut down, filed for bankruptcy, or gone permanently dark in 2026, with the pace accelerating. The article also notes multiple major closures or filings announced within a single week in late July, naming BitMEX, BitMart, Movement Labs and Storj Labs, and it cites the permanent shutdown of Polkadot parachain Moonbeam on July 31.

CoinDesk adds that Ethereum’s layer-2 ecosystem has been shrinking after earlier growth, when advances reduced transaction costs and made it simpler for companies to launch chains. It says that as general-purpose layer-2s proliferated, differentiation fell, and Ben Fisch, CEO of Espresso Systems, described the current phase as consolidation for general-purpose layer-2s rather than layer-2s overall.

Latest closeEthereum $1,921.82 ▲0.3%

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