Syndicate Labs has announced it will shut down operations after saying the market for Ethereum rollup infrastructure has weakened to the point where the business is no longer sustainable.
In a statement posted on X, the company said the Ethereum rollup market has “fundamentally shifted,” explaining that the number of new projects entering the space no longer makes up for the growing number of rollups and smaller networks shutting down quietly.
Syndicate Labs was originally created to help developers build customizable Ethereum appchains and application-specific rollups. The company raised $20 million in funding in 2021 in a round led by Andreessen Horowitz.
However, the broader layer-2 market has changed significantly over the past year. Activity and liquidity have increasingly concentrated around major Ethereum scaling networks such as Arbitrum, Base, and Optimism’s OP Mainnet, leaving smaller projects struggling to attract users and capital.
Data from L2Beat showed that the total value secured across Ethereum rollups has fallen around 36% from its October peak of more than $50 billion. The largest networks now control roughly 75% of the market.
Separate research from 21Shares previously described many smaller layer-2 networks as “zombie chains” because of declining activity and weak user engagement.
Syndicate Labs also said its closure was unrelated to the Syndicate Commons Bridge exploit that took place in April. During that attack, hackers reportedly stole around 18.5 million SYND tokens along with additional user assets after gaining access through a leaked private key.
The company later admitted the bridge system lacked important protections such as multisignature approval and automated safety systems for upgrades. Blockchain security firm CertiK later traced part of the stolen funds after they were bridged into Ethereum.
Following Thursday’s shutdown announcement, the SYND token dropped another 21%, reaching a new all-time low near $0.012. The token has now lost about 99.5% of its value since hitting its peak in September 2025.
Syndicate Labs joins a growing list of crypto and DeFi projects that have scaled back or closed operations this year because of weak activity, falling revenue, and difficult market conditions.
