Ethereum Layer 2 platform Zero Network will shut down after roughly 18 months of operation, Zerion said Thursday, as the team shifts resources back to its wallet and infrastructure products. Users have been told to withdraw all assets by the end of July, with bridging into the network already halted.
User withdrawals and shutdown timeline
Zerion said all funds on Zero Network remain secure and can be withdrawn, including ETH, NFTs, and ERC‑20 tokens. Bridging into the chain has been disabled, and users now have a limited window to exit before the network winds down.
Zero Network, launched in November 2024, was an Ethereum Virtual Machine–compatible rollup that offered gasless transactions aimed at simplifying onboarding for everyday users. The team said that running a standalone Layer 2 chain no longer fits its long‑term strategy.
Zerion refocuses on wallet and infrastructure
Founded in 2016, Zerion operates a self‑custody wallet available on mobile and as a browser extension. The company also provides a multichain portfolio tracking API used by major platforms such as Coinbase and Kraken Wallet.
The team will now concentrate on expanding these infrastructure and wallet services rather than maintaining an independent Layer 2 network. With around $1.4 million in total value secured, Zero Network failed to build the sustained activity needed to justify ongoing operation.
Layer 2 market consolidates around a few dominant chains
The decision comes as the Ethereum scaling sector enters a period of sharp consolidation. By late 2025, forecasts already suggested that many of the more than 50 Layer 2 networks would struggle to survive through 2026 as activity and liquidity concentrated on a few leaders.
By the end of last year, networks such as Base, Arbitrum, and Optimism were handling nearly 90% of Layer 2 transactions, leaving smaller rollups fighting for relevance and revenue in a crowded market.
Running a dedicated chain has become increasingly difficult to justify for projects without clear monetization, deep liquidity, or strong network effects. For many teams, the economics now favor building tools, infrastructure, and applications on top of existing major chains rather than competing with them.
Wave of shutdowns hits blockchain projects
Zero Network’s exit adds to a growing list of recent closures in the crypto sector. Earlier this week:
- Everclear said its protocol, foundation, and research units will shut down.
- Infrastructure provider Syndicate Labs announced it will cease operations.
- Crypto trading card game Fantasy.top also confirmed it is closing.
Many of these teams cited persistent market pressure and limited resources as reasons for winding down, underlining how difficult it has become to sustain long‑term development without a clear revenue model.
Profitability challenges across different models
Everclear, a cross‑chain protocol, is shutting down despite previously processing more than $500 million in monthly volume. The team said heavy price sensitivity among users prevented the platform from charging meaningful fees, making the business unsustainable once its financial runway ran out.
Syndicate Labs, after five years in operation, said demand had shifted away from its reusable rollup framework toward custom chains built by specialized consulting firms. The company noted that for each new rollup that launches, several others quietly disappear, underscoring the oversupply of similar infrastructure.
Fantasy.top’s closure highlights a different challenge. Co‑founder Kipit said the trading card game’s design—turning cards into financial assets from day one—pulled in speculators before attracting genuine players. That structure, he argued, undermined product development and community building. The game paid out around $20 million to its community but could not generate enough trading volume to operate profitably.
What the trend signals for the market
The cluster of shutdowns across Layer 2 networks, infrastructure providers, and gaming projects points to a market with little tolerance for business models that cannot convert usage into sustainable revenue.
For traders and teams active in the sector, the current environment is rewarding:
- clear economic design over pure user metrics,
- proven demand over experimental monetization models, and
- concentration around established, liquid ecosystems over fragmented chains.
With activity and capital increasingly focused on a handful of major Layer 2 networks, newer or smaller chains face rising pressure to either find a distinct, profitable niche—or step back and reorient around more sustainable parts of the stack, as Zerion has chosen to do.
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