Over Protocol Foundation Fully Stops Infrastructure Services Due to Exhausted Funds
The Over Protocol Foundation announced that due to financial constraints, it has ceased operations of OverWallet, OverNode, OverFlex, RPC nodes, block explorers, and all related APIs, with no recovery plan in place.
As a Layer 1 mainnet, Over Protocol was designed to be decentralized, but without the support of the foundation, block production will completely depend on whether independent validators continue to run the open-source client, and the foundation cannot provide any guarantees.
In market mechanisms, funds from crypto projects are shifting from high-maintenance infrastructure to sustainable operational projects, leading Over Protocol holders and users to accelerate their exit, while independent validators and open-source client maintainers face short-term pressure. Meanwhile, well-capitalized leading Layer 1 and compliant projects benefit from the industry's shutdown wave, with capital further concentrating on projects with strong cash flow.
Source: Public Information
ABAB AI Insight
Over Protocol previously expanded its infrastructure rapidly through a token fundraising model. This complete shutdown continues the liquidation wave in the crypto industry that began in 2026, with projects like Dmail, Tally, and Step Finance also ceasing operations. The core issue lies in the lack of a mature bankruptcy liquidation and restructuring framework, which prevents coordination with creditors or orderly exits after the funding chain breaks.
In terms of capital pathways, the foundation exhausted its remaining resources on early-stage node and wallet maintenance, failing to reserve enough runway to cope with the bear market. User funds are migrating from Over chain assets to active chains like Solana and TON. The strategic deficiency is reflected in an excessive reliance on token price to support operations rather than establishing real revenue models or diversified funding sources.
Similar cases include numerous Layer 1 projects gradually dying due to insufficient gas fee revenue during the 2022-2023 bear market, as well as multiple incidents of foundations running away or suddenly shutting down in 2025. Currently, Over Protocol is in the final stage of transitioning from an active mainnet to a de facto dead chain.
Essentially, this represents capital concentration: the fragile model of crypto projects relying on token fundraising is exposed, with the mechanism being that during a bear market, both user activity and financing dry up, leading to a rapid clearance of weak cash flow projects. This results in pricing power shifting from high-burn infrastructure projects to a few on-chain entities with sustainable income and strong community-independent operational capabilities, while accelerating the industry's reconstruction from quantity expansion to quality selection.