Crypto Landscape Undergoes Widespread Consolidation as More Than 100 Projects Cease Operations in 2026

Ben Fisch, CEO of Espresso Systems, explained to CoinDesk that the crypto ecosystem has become saturated with generic layer‑two solutions that offer little differentiation. “There were way too many general‑purpose layer twos, which frankly don’t make sense as a product because there’s no reason to have many, many versions of the same thing,” he said. “We’re in a consolidation phase for general‑purpose layer twos, not layer twos broadly.”

IndustryTempo, the Winery, said that this shakeout signals a broader transformation within the sector, rather than a problem exclusive to Ethereum scaling networks.

“Consolidation is happening across all of crypto right now, from DeFi protocols to DEXs and infrastructure providers,” Marek Olszewski, co‑founder of the Celo layer‑2, told CoinDesk. “It’s a sign that the industry is maturing. The networks continuing through this period are the ones people actually use and depend on.”

Nick Puckrin, founder of Coin Bureau, noted on X that for every high‑profile project folding, there are probably an additional dozenіне quietly doing the same. He called the trend a form of “creative destruction for the next cycle.”

Orkun Mahir Kılıç, co‑founder and CEO of Chainway Labs, which is building the Bitcoin layer‑2 Citrea, stated that the wave of closures reflects a market that is maturing, where capital is harder to raise and investors are becoming more selective.

“Different businesses have different reasons and underlying problems for shutting downapk. The pattern we’re seeing is not an inherent problem within the L2 ecosystem. Investment has become slower and more cautious now, and only projects with sound business models and a clear problem statement will survive,” Kılıç told CoinDesk.

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