Layer 1 and Layer 2 Crypto Projects Shutdown: 12 Major Exits

What Is Driving the Layer 1 and Layer 2 Crypto Projects Shutdown Wave?

Crypto has seen several network closures in 2026, with both established and emerging blockchain projects winding down their operations. Layer 1 and Layer 2 Crypto Projects Shutdown reflects this shift, as networks face challenges such as low adoption, rising operating costs and limited ecosystem growth. These closures also raise important questions about user funds, asset withdrawals and migration options. 

Key Takeaways

• Twelve Layer 1 and Layer 2 networks announced closures in 2026.

• Most teams cited weak adoption or high costs, not hacks.

• Deadlines are close: Lisk Chain closes on 31 October, Sophon on 30 November and Abstract on 15 December.

What Happened to Layer 1 and Layer 2 Networks?

Many chains launched in the last cycle expecting steady users. In 2026, crypto projects ending operations became common because quiet networks could not cover their costs. Facts below come from official sites where available, with news reports filling the gaps.

Layer 1 and Layer 2 Crypto Projects Shutdown: Quick Snapshot

Layer 1 Projects Shutdowns

1. CoinEx Smart Chain

CoinEx Smart Chain was the blockchain network of the CoinEx exchange. It was tied to CET, the exchange’s own token.

Why the Exchange Closed

The exchange announced its wind-down on 15 September, citing a weak market, falling liquidity and rising regulatory costs.

Timeline for Users

The chain and its DEX, OneSwap, stopped on 29 September, and withdrawals stay open until 22 December. The exchange also repurchased leftover CET at 0.005 USDT.

2. Hyli

Hyli was a zero-knowledge Layer 1 designed to run smart contracts across several ZK proof systems. It never issued a token.

Why Hyli Stopped

After two years of building, the team said on 10 June that ZK “has not gained the traction we had hoped for,” as The Defiant reported. It saw no viable path to launch.

What Remains

Hyli had raised $3.4 million, according to OurCryptoTalk. Its code stays open-source on GitHub.

Layer 2 Projects Shutdowns

3. Blast Network Shutdown

Blast was an Ethereum Layer 2 with native yield on ETH and stablecoins, its docs say. Its token, BLAST, traded on exchanges such as Coinbase.

Why Blast Closed

The team announced the closure on 2 October because costs passed revenue. Value locked had fallen about 98%.

How Users Recover Funds

Coinbase halted BLAST trading on 20 October, and users had to move assets by 26 October. Blast’s recovery page now lets accounts that held ETH, WETH or USDB withdraw on Ethereum.

Source: official documentation.

4. Abstract Network Updates

Abstract was a consumer-focused Ethereum L2 built by Igloo, the Pudgy Penguins parent. Its website pitched it as a home for trading, gaming, social and AI apps.

What Users Must Do

Its migration page says the chain shuts down on 15 December after almost three years. Users who do not migrate by then lose access to their funds. The page lists the native bridge, Stargate, Relay and Jumper as options.

5. Sophon Blockchain

Sophon was a L2 built for consumer and entertainment apps. Its token, SOPH, is meant to benefit from buybacks and burns funded by product revenue, the site says.

A Change of Direction

The website says Sophon raised $60 million in 2024 to build a chain. The team later decided “general purpose is no purpose at this point.” It became a studio building consumer apps, such as the Pyre payment card.

The Withdrawal Deadline

News reports set the mainnet shutdown for 30 November, with withdrawals due by 25 November.

Source: official claim site.

6. Neon EVM Network

Neon EVM let developers run Ethereum apps on Solana. Its token, NEON, lives on Solana as an SPL token.

What Changed

The official site says development and support end on 1 October, and users must migrate or withdraw by 31 December. No reason beyond a review of the project’s position was given.

Impact on NEON Holders

The NEON token is not cancelled, but the team gives no assurance about its future use. Exchanges decide for themselves whether to keep supporting it.

7. Polygon zkEVM Sunset

Polygon zkEVM was a zero-knowledge Layer 2 run by Polygon Labs in a Mainnet Beta phase.

What Was Sunset

Polygon Labs sunset the sequencer on 3 July, and the network stopped producing blocks.

Recovering Funds

Holders of self-custodied wallets can recover assets on Ethereum through a claims tool until 31 December 2027. Funds locked in smart contracts, such as DeFi positions, cannot use that tool.

8. Loopring Network Changes

Loopring was Ethereum’s first zk-rollup. Its token, LRC, came from a $45 million ICO in 2017.

The Adoption Gap

On 28 June, the team closed its DEX, saying it “never gained meaningful adoption.” It had no virtual machine, so apps could not build on it.

How Users Get Paid Back

Value locked fell about 99% from its peak, and LRC dropped to about $0.01. The team is sending balances back to users’ Ethereum wallets in batches and covering gas fees.

9. Botanix Blockchain

Botanix built a Bitcoin Layer 2 called Spiderchain. It ran without a native token.

The Token Experiment

The team announced its wind-down on 5 June. It tried to win users without token incentives and concluded that did not work in this market. It noted that WBTC on existing Layer 2s covers most Bitcoin DeFi demand.

Shutdown Timeline

Its post sets a 1 July target, a grace period to 15 July and a final shutdown by 1 August if needed. The chain processed 25 million transactions.

Source: Botanix documentation. 

10. Zero Network Shutdown

Zero Network was a gasless Ethereum L2 from the Zerion team, built to make transactions free for users.

Why It Closed

Zerion announced the closure after about 18 months, citing low adoption.

Steps for Users

Incoming transfers were disabled, and users were told to bridge out before the end of July. The official site says the chain has stopped producing blocks, and users with remaining funds can submit their address for recovery.

11. Mint Blockchain Updates

Mint was an NFT-focused L2 built on the OP Stack. It had its own token, MINT.

Why It Closed

The team gave no specific reason, according to BlockEden. L2BEAT now lists the chain as archived.

Withdrawal Window

It announced the closure on 17 April and set 20 October as the withdrawal deadline. Withdrawals ran in weekly batches, and each batch took up to 10 days to settle.

Source: official website.

12. Lisk Chain

Lisk has existed since 2016, and LSK is its token. The Lisk Chain was its blockchain network.

A Business Pivot

Lisk’s own blog says the chain shuts down on 31 October as the company becomes a money operations platform for finance teams. Projects can migrate to Celo, and the DAO is winding down.

What Holders Needed to Do

The team burned 100 million LSK, cutting supply from 400 million to 300 million. Holders had to move tokens to Ethereum before the deadline, and bridging takes about eight days.

Why Are Crypto Networks Shutting Down in 2026?

The reasons differ, but a few themes repeat.

Final Thoughts

Layer 1 and Layer 2 Crypto Projects Shutdown cases show that technology alone did not keep chains alive. Crypto Projects Shutdown in 2026 mostly followed weak adoption, not hacks. Users should check each team’s official page, withdraw before deadlines, and ignore private messages offering help.

Disclaimer: This article is for information only and is not financial advice. Details come from public reports and may change.