From 70 million USD in financing to shutting down, Sophon only took two and a half years

Original | Odaily Planet Daily Wenser

On October 20, the modular blockchain project Sophon, which has raised over $70 million, announced that its mainnet will officially shut down on November 30, and users must withdraw their assets by November 25. The shutdown of the mainnet was planned well in advance; in June of this year, the official announcement stated that the L2 network would be shut down and migrated to Base, shifting focus to consumer application development.

From the investment frenzy in 2024, market optimism, to the transformation into consumer application development in June of this year, and now the impending official shutdown of the mainnet, Sophon has taken two and a half years. The era supported solely by narrative has quietly come to an end, and many crypto projects, including modular blockchains, now need to rethink whether they can find new sources of revenue.

Mainnet Shutdown Despite Over $70 Million in Funding: The Hard Costs and Soft Risks Faced by Sophon

Sophon was once highly sought after in the market due to its over $70 million in funding, with plans for TGE in 2025 to launch on multiple leading CEXs, backed by investment institutions from the Binance ecosystem and OKX. However, the glory of modular blockchains is no more, and the various technical expenditures and hard costs faced by the project are very real. Perhaps a normal and orderly shutdown of the mainnet is the best outcome, and countless users can only accept this quietly.

The Journey: $70 Million in Funding, Investors Include OKX Ventures, Binance Labs (now Yzi Labs)

In March 2024, Sophon completed a $10 million funding round, with investors including Paper Ventures, Maven 11 Capital, The Spartan Group, SevenX Ventures, OKX Ventures, HTX Ventures, and others.

In May 2024, Sophon raised $60 million through node sales, gaining significant momentum.

In October 2024, Sophon's list of investors saw a major update—Binance Labs (now Yzi Labs) participated in the investment. Although the specific investment amount was not disclosed at that time, this move paved the way for the future token launch on Binance.

In December 2024, Sophon’s mainnet officially launched.

In May 2025, Sophon officially conducted its TGE, with a total token supply of 10 billion SOPH, of which 57% belongs to the community and 9% is allocated for airdrops. Subsequently, SOPH was listed on leading CEXs such as Binance, OKX, Upbit, and Gate, with the price peaking at $0.111 before falling back, gradually disappearing from public view like other modular blockchain networks.

The next update came in June of this year. Sophon is about to shut down its own Layer 2 blockchain and migrate to Base.

On June 25 of this year, Sophon officially announced the closure of its own Layer 2 blockchain and migration to Base, with future focus shifting to consumer application development. Project co-founder Sebastien stated that the team believes true value lies not in "who runs the underlying track," but in the products built on it. Therefore, Sophon will no longer maintain infrastructure but will concentrate resources on the application layer.

The official announcement also revealed the annual hard costs of maintaining Sophon: chain infrastructure, RaaS, data, analytics, and development tools totaling approximately $3.4 million. After the shutdown, it is expected to save about $3 million annually, extending the funding runway and investing in application development.

Sophon’s shutdown plan subsequently triggered a series of reactions: Binance stopped on-chain deposits and withdrawals, LayerZero ceased providing off-chain support, and Upbit terminated trading support, leading to a natural plummet in the price of SOPH tokens. According to DeFiLlama, its TVL has dropped from a peak of about $20.1 million on May 30, 2025, to about $16,500, with on-chain fees, revenue, and active addresses all reduced to zero.

Thus, a once star project that raised tens of millions gradually reached its exit moment.

For participants in the Sophon network, there are three key points to note:

• First, withdraw liquidity assets (SOPH, ETH, USDC, etc.) through official channels and claim any previously unclaimed staking or Guardian rewards.
• Second, handle any unwithdrawn Sophon farm assets through official channels.
• Third, node holders and others must follow the official migration guide. New deposits have been closed since June 25, 2026, and SOPH already has an Ethereum ERC-20 version.

Additionally, all of the above operations must be completed by November 25; do not wait until November 30, the day the mainnet officially shuts down, to take action.

Current Status of Modular Blockchains: DA Layer Still Active, General L2s Exiting

With the shutdown of Sophon’s mainnet, the next question of market concern is: Has the modular blockchain network been completely discredited?

Currently, it is still difficult to conclude "yes" to this question. Looking at the existing modular blockchain projects in the market, there are still highly active popular projects, but general-purpose L2s and AppChains have indeed reached the elimination stage. Overall,

• DA layers (such as Celestia, Avail, EigenDA): Technical indicators such as throughput and sampling are still improving, but real costs and large-scale adoption remain bottlenecks; some projects are attempting new narratives such as AI payments and proxy economies.
• The application layer is concentrating towards the top: Mature L2s like Base and Arbitrum, along with aggregation solutions like Polygon Agglayer, have become the default choices, while the costs and thresholds for building general-purpose chains are being recalculated.

For ZK Stack/Rollup projects like Sophon, even with backing from institutions like Binance Labs and OKX Ventures, it is difficult to survive the next cycle without a clear business model and sustainable revenue. Previous examples like Abstract and Blast, and more "ghost town" blockchain network ecosystems will likely join this list in the future.

After all, hot narratives can only bring a project temporary market hype and participation. In a prolonged battle, it ultimately depends on whether you can stimulate trading and build an ecosystem to obtain long-term liquidity funding.