DeFi projects shutting down as capital shifts to newer crypto apps
Zapper, Botanix and other DeFi names are closing in 2026 as analysts point to tougher competition and more selective capital.
By Sofia Marchetti · Columnist
· 3 min read
DeFi projects shutting down in 2026 now include Zapper, Botanix, Step Finance, Parsec and Odos Protocol, according to company announcements and Cointelegraph reporting. For retail investors, the closures show that surviving the 2022 crypto crash did not guarantee that a protocol could keep users, fees and liquidity in a more crowded market.
Zapper, a decentralized finance dashboard, said this month it would close after almost seven years. It joins Bitcoin DeFi platform Botanix, Solana portfolio tracker Step Finance, DeFi analytics platform Parsec and decentralized exchange aggregator Odos Protocol, all of which have wound down or are in the process of doing so this year.
RootData has counted 101 dead crypto projects in 2026 as of July 26, with DeFi accounting for more than half of them. DeFi, short for decentralized finance, refers to blockchain-based apps that let users trade, lend, borrow or manage assets without a traditional bank or broker in the middle.
Why are DeFi projects shutting down?
Analysts cited by Cointelegraph Magazine say the closures are less about users abandoning crypto and more about activity spreading into new apps and away from older DeFi business models. Artemis Research’s Alex Weseley said data from tracked DeFi protocols shows concentration has moved lower since 2024, even though major categories still have clear leaders such as Uniswap in decentralized exchanges, Aave in lending and Jupiter in perpetuals.
Perpetuals are crypto derivatives that let traders bet on price moves without an expiration date. Total value locked, or TVL, measures how much crypto is deposited in a protocol, but Weseley said revenue and fees give a better read on whether an app has a durable business.
According to Artemis estimates cited by Cointelegraph, the number of DeFi apps producing at least $1 million in monthly fees rose to about 33 or 34 in mid-to-late 2025, then fell to roughly 25 or 26 in the first half of 2026. The number generating more than $10 million in monthly fees fell by about half over that period.
Botanix’s founders pointed to weak demand when they announced the platform’s closure. They told Cointelegraph in June that onchain activity had gathered around a smaller set of venues, including Hyperliquid and large centralized exchanges, which sped up Botanix’s decline.
Capital is getting pickier
Gauntlet chief business officer Nicholas Cannon told Cointelegraph Magazine that overall demand remains strong, citing growing stablecoin supply and rising interest from traditional finance. His view is that investors have become more selective about where they put capital, with less willingness to chase short-term token rewards.
Markus Levin, co-founder of blockchain infrastructure company XYO, said the DeFi field is more competitive than during the last bear market. He said early projects benefited from being first in a smaller market, while thousands of protocols now compete for the same users and liquidity.
That shift changes what survival looks like. Levin said institutional capital is favoring platforms with stronger records, while newer protocols need meaningful distribution or users beyond the existing DeFi crowd.
Where the money is moving
Cointelegraph reported that investment is still reaching parts of DeFi tied to infrastructure and new use cases. Morpho announced a $175 million raise in June to bring institutional lending onchain, while agentic DeFi startup Alpaca raised $135 million in July for AI-powered financial infrastructure.
Morpho Labs co-founder Merlin Egalite told Cointelegraph Magazine that the fastest-growing protocols are likely to be embedded in platforms where users already spend time, including fintech apps, wallets and exchanges. He said future growth may come from banks and financial platforms using DeFi infrastructure rather than building it from scratch.
The read-through for investors is straightforward: project closures are a signal to look past survival and brand recognition. In DeFi’s 2026 market, fee generation, user access and sustainable demand appear to matter more than older cycle status.
This story draws on original reporting from Cointelegraph.
