DeFi projects that survived the 2022 collapses of Terra and FTX are shutting down one after another in 2026.

A recent Cointelegraph report said analysts see the situation as the result of fiercer competition within DeFi, rather than a broader industry consolidation.

DeFi dashboard Zapper said it will end its service in July, about 7 years after launch. Bitcoin DeFi platform Botanix, Solana portfolio tracking service Step Finance, DeFi analytics platform Parsec and DEX aggregator Odos Protocol have also shut their businesses this year or are in the process of winding down.

The trend is not limited to DeFi. As of July 26, 101 crypto projects have closed this year, based on RootData tallies. More than half of them were DeFi-related projects.

Some analysts also say DeFi market concentration has fallen. Alex Wszoly (알렉스 웨슬리) of Artemis Research explained that concentration among tracked DeFi protocols has declined since 2024. He said sector leaders such as Uniswap, Aave and Jupiter still exist, but their market shares are lower than 2 years ago.

Wszoly also highlighted that fees and revenue show real economic activity better than total value locked.

TVL is appropriate for viewing liquidity, but it can distort the trend in other areas, he said. Fees and revenue directly show economic sustainability, he added. Onchain activity has not left the ecosystem, but has shifted to other parts of the crypto economy, meaning more protocols are dividing up smaller pieces, he said.

Actual revenue indicators worsened. Artemis estimates the number of DeFi applications generating monthly fees of at least $1 million rose to about 33 to 34 in mid to late 2025, then fell to about 25 to 26 in the first half of 2026. The number of projects generating monthly fees of at least $10 million fell by about half over the same period.

Botanix founders cited weak demand as the reason for closing. They said Botanix's decline accelerated in June as onchain activity concentrated on Hyperliquid and a few large centralised exchanges.

Some also see demand as still strong. Nicholas Cannon (니컬러스 캐넌), chief business officer at Gauntlet, said stablecoin supply keeps growing and traditional finance is also moving toward DeFi. Gauntlet sees investors, unlike in previous downturns, as being less swayed by short-term yield-farming token incentives and acting more selectively.