Crypto’s Latest Casualty: Entropy Bites the Dust, Investors Get a Refund!

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Well, butter my biscuit and call me disappointed! The A16z-backed crypto wunderkind, Entropy, has thrown in the towel after a valiant (or perhaps not so valiant) struggle to find a business model that could scale beyond “my-mom-thinks-I’m-cool” levels. Yes, folks, the venture-scale dream has officially been downgraded to a venture-fail.

  • Entropy, the crypto startup with more pivots than a ballet dancer, is shutting down because, surprise, surprise, it couldn’t scale to venture-level returns. Who could’ve seen that coming?
  • Investors, rejoice! Your money is coming back. Though, let’s be honest, it’s probably just going to end up in another crypto project that’ll flame out by 2026.

Founder and CEO Tux Pacific (yes, Tux, like the penguin suit, not the Linux mascot) announced that after four years of head-scratching and pivoting, the team has officially run out of ideas. “We tried everything,” Pacific said, “except maybe hiring a shaman to curse our competitors. But even that probably wouldn’t have worked.”

Entropy began its journey in late 2021 as a decentralized custody platform, backed by the bigwigs of the tech world: Andreessen Horowitz, Coinbase Ventures, and Dragonfly Capital. They even snagged a cool $25 million in seed funding in 2022. But as we all know, money can’t buy you a sustainable business model-or common sense, apparently.

Over four years, the company pivoted more times than a weathervane in a tornado, eventually settling on crypto automation. In the second half of 2025, they unveiled a platform integrated with AI, aiming to be the decentralized Zapier. Spoiler alert: it didn’t zap anything but their hopes and dreams.

Pacific explained that after an “initial feedback request” (read: someone finally told them the truth), they realized their business model wasn’t venture scale. Shocking, I know. So, they decided to shut down and return the capital to investors. Because, you know, honesty is the best policy-especially when you’ve run out of options.

“I was left with the choice to find a creative way forward or pivot once more,” Pacific said. “After four hard years in crypto, I decided the best I could do has already been done. It was time to close up shop and find a field where failure isn’t celebrated as innovation.” And with that, he’s off to explore pharmaceuticals. Because clearly, he’s got a knack for industries that require a strong stomach.

The Crypto Graveyard Grows

Entropy’s demise is just the latest addition to the ever-growing list of crypto projects that went the way of the dodo in 2025. Remember Linear Finance? Neither does anyone else. The NGC Ventures-backed project shut down in March after financial troubles and a Binance delisting that left it as sustainable as a snowman in July.

And let’s not forget the Web3 gaming space, where projects are dropping like flies in a bug zapper. Ember Sword, the Ethereum-based MMORPG, shut down just months after its early access launch. It joined the ranks of other high-profile failures like Deadrop, Nyan Heroes, and Tatsumeeko, all of which couldn’t survive the brutal funding environment and user engagement that was about as lively as a funeral procession.

So, what’s the moral of the story? Crypto is hard, venture scale is harder, and maybe, just maybe, we should all stick to investing in things that don’t require a PhD in blockchain to understand. But hey, at least the investors got their money back. Small victories, right?

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2026-01-26 12:04