May 2026 has become a period of significant contractions in the DeFi sector. The Bitcoin Foundation editorial team reports on the latest high-profile events and analyzes the negative trend affecting decentralized finance.
Two major projects — the L2 network ZERϴ Network by Zerion and the cross-chain infrastructure Everclear — have announced they are ceasing operations.
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ZERϴ Network Winding Down
The Zerion team has announced the gradual shutdown of its gasless Ethereum (ETH) L2 network, ZERϴ Network. The project launched in November 2024 with the goal of eliminating gas fees as a major barrier to cryptocurrency mass adoption.
Users are advised to withdraw all assets, including ETH▲$1,684.58, tokens, and NFTs, by July 31, 2026. After this date, deposits will be completely disabled, and block production will stop.
Read more: Top Ethereum Gas Fee Solutions in 2026 — How Cheap Is ETH Now?
Zerion explained the decision as a desire to focus all resources on developing its core product: the Zerion crypto wallet and API services. The experience gained from operating ZERϴ will be used to improve these areas.
Everclear Ceases Operations
Cross-chain infrastructure project Everclear has announced the closure of its core UI, protocol, foundation, and research lab.
Everclear specialized in balancing and moving assets between blockchains. At its peak, the project processed up to $500M in monthly trading volume but failed to achieve sustainable monetization.
The team noted that attempts to pivot to business-to-business operations and integrate with major players dragged on, and funds ran out before new partnerships began generating revenue.
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Here are a couple of other projects that closed in May 2026:
- Syndicate Labs — an infrastructure project that operated for five years
- Fantasy.top — a crypto card game that lasted two years
Why Is DeFi Facing Problems?
Analysts link the wave of closures to the prolonged market downturn, intense competition, and difficulties in attracting and retaining users. Many projects were unable to transition from the experimental stage to a sustainable business model.
Against this backdrop, a natural market consolidation is occurring. Resources and attention are concentrating around the strongest and most adaptable solutions.
Learn more: Top 5 High-Growth DeFi Projects in 2026 — Where Smart Money Is Moving
