Reason Identified for the Collapse of Crypto Startups Generating $1 Million in Revenue, 2026/02/16 18:07:50

Crypto startups that issue their own tokens and generate monthly revenues exceeding $1 million are shutting down 50% more frequently than new ventures that refrain from launching coins, according to 0xngmi, a co-founder of the DeFi analytics platform DeFi Llama.

He believes that the intention to release a token adversely affects the long-term outlook for cryptocurrency startups, even if they have achieved some market success.

“The actual failure rate of projects is likely even higher, as it does not account for high-capitalization projects that never began to generate revenue. Additionally, companies that closed before listing on crypto exchanges were also excluded from the analysis,” 0xngmi explained.

The crypto entrepreneur noted that the introduction of new tokens often attracts speculators, who lose interest in the project just days after receiving rewards. Sometimes, the closure of projects can be attributed to the founders themselves, who quickly profit from the product launch and subsequently neglect the genuine development of the project.

Launching a project’s own coin also introduces technical challenges for startups. Smaller projects risk being delisted from major centralized exchanges due to low trading activity. To avoid removal from these platforms, teams are compelled to allocate their limited human and financial resources to maintain artificial trading activity, as explained by the co-founder of DeFi Llama.

Ethereum co-founder Vitalik Buterin believes that many social and gaming blockchain projects fail for a single reason: developers focus too much on the technological aspects and the issuance of tokens.