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Legend, a mobile-first DeFi superapp backed by Andreessen Horowitz and Coinbase Ventures, is shutting down after two years of operation, its co-founder said Tuesday, the latest venture-funded crypto startup to collapse as the DeFi sector’s prolonged liquidity squeeze claims another casualty.
The company said the app will remain operational for 60 days before officially going offline on July 12.
Legend’s shutdown highlights a broader problem confronting crypto startups: user engagement alone is no longer enough to sustain operations in a difficult macroeconomic environment.
According to Hobby, they believe the right interface could put DeFi’s most powerful primitives in front of mainstream users.
Despite attracting users and securing institutional backing, Legend ultimately failed to reach profitability or sufficient scale. Hobby acknowledged the company’s limitations directly.
The startup had raised $15 million in funding in February 2025, positioning itself as a consumer-friendly gateway to decentralized finance. The app integrated with leading DeFi protocols including Aave, Compound and Uniswap.
However, the broader DeFi sector has suffered declining activity and liquidity during the recent crypto bear market.
Industry data cited by Cointelegraph shows total value locked (TVL) across DeFi ecosystems has fallen approximately 50% since October, reducing fee generation and weakening business models reliant on sustained onchain activity.
Legend’s collapse reflects a growing shift among venture investors, who are increasingly prioritizing sustainable revenue generation over rapid user acquisition and speculative growth.
The statement signals a broader industry realization that mainstream adoption may depend less on crypto-native branding and more on seamless financial products that abstract away blockchain complexity.
For crypto investors, the shutdown also reinforces concerns about the viability of consumer-facing DeFi applications that rely heavily on venture capital funding while operating in volatile market cycles.
Several other crypto firms have announced closures in recent months. Solana-based DeFi aggregator Step Finance shut down after a reported $40 million treasury breach earlier this year.
Meanwhile, lending protocol ZeroLend cited unsustainable operating conditions and weak liquidity across blockchain ecosystems when it announced plans to wind down operations.
The failures suggest that even well-funded crypto startups remain vulnerable to declining liquidity, shrinking trading volumes and reduced retail participation.
Industry analysts increasingly expect further consolidation across the DeFi sector as projects with weak revenue models struggle to survive prolonged market uncertainty.
While infrastructure-focused protocols and established exchanges continue to generate substantial fees, smaller consumer applications face mounting competition and thinner margins.
Investors are also becoming more selective, directing capital toward platforms with proven product-market fit and sustainable cash flow generation.
Legend’s shutdown may therefore represent more than an isolated startup failure. Instead, it reflects a structural shift across the crypto industry, where speculative growth narratives are giving way to operational discipline and profitability concerns.
For users, Legend said normal functionality will continue during the wind-down period, giving customers time to withdraw or migrate assets before the platform ceases operations in July.
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