Cardano founder Charles Hoskinson has warned that more projects could shut down in the second half of 2026 as the network struggles with declining activity, shrinking capital inflows, and growing financial pressure on builders.
Cardano founder Charles Hoskinson has warned that more projects could shut down in the second half of 2026 as the network struggles with declining activity, shrinking capital inflows, and growing financial pressure on builders. His comments came shortly after the surprise closure announcement from TapTools, one of Cardano's most widely used analytics platforms.
According to Hoskinson, the shutdown may be only the beginning of a larger wave of failures that could hit Cardano's DeFi and application ecosystem over the coming months.
Speaking about the current state of the Cardano ecosystem, Hoskinson said he had predicted at the start of the year that many projects would struggle to survive due to worsening market conditions.
According to him, ecosystem projects need funding and support to continue growing, but efforts to create long-term solutions have not moved forward as expected.
Hoskinson explained that he previously proposed an index-based strategy designed to help ecosystem projects gain access to capital and survive difficult market conditions. However, the proposal was never implemented. As a result, several projects have already shut down, and he believes more may soon follow.
"The second half of the year for Cardano, we're probably going to see more dApps and DeFi projects die, and a consolidation happen," Hoskinson said.
He added that he is no longer certain what role he can personally play in preventing those outcomes.
The latest concerns emerged after TapTools announced it would cease operations within two weeks.
For many Cardano users, TapTools served as the primary dashboard for tracking tokens, market activity, and ecosystem performance.
The team behind the platform cited rising infrastructure costs and the departure of key technical executives as major reasons behind the decision.
Because TapTools was one of the most visible tools within the Cardano ecosystem, its closure immediately triggered discussions about the financial health of other projects operating on the network.
Many community members now fear that smaller projects may face similar challenges.
The TapTools announcement follows another major setback for Cardano. Just weeks earlier, JPG Store, the network's largest NFT marketplace, announced it was shutting down permanently.
The platform cited operational sustainability issues and changing market conditions as key reasons for its closure. The loss of both JPG Store and TapTools within a short period has intensified concerns that the ecosystem may be entering a broader consolidation phase.
While some projects may survive, others could struggle to secure funding, attract users, or maintain development teams.
Behind the project closures lies a larger issue: declining network activity. Recent data shows that capital has gradually been moving away from Cardano toward competing Layer-1 blockchains.
Cardano's Total Value Locked (TVL) has fallen to roughly below $120 million, placing it behind several newer blockchain networks, including Aptos and Mantle.
Lower TVL often signals reduced user activity and weaker participation across decentralized finance applications.
Hoskinson also revealed that he has attempted to preserve certain ecosystem projects through acquisitions. He pointed to previous efforts involving Nami Wallet and Blockfrost, where resources were used to acquire and commercialize struggling services.
However, he suggested that community resistance has sometimes made these efforts difficult.
According to Hoskinson, proposals involving treasury funding for existing projects have not always received enough support from ADA holders.
Instead, funding often flows toward new initiatives rather than helping established projects survive.
Despite the challenges, Hoskinson has not suggested that Cardano itself is in danger.
Meanwhile, ADA continues to face market pressure, trading near multi-year lows around the $0.19 range after losing nearly 70% of its value over the past year.
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