From zkSync to Building and Then Rapidly Shutting Down a Chain: A Year in the Life of an L2 Founder
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From zkSync to Building and Then Rapidly Shutting Down a Chain: A Year in the Life of an L2 Founder
Seeking blood transfusions, cutting costs, banding together for warmth, and waiting for a turning point.
Navigating Web3 tides with focused insightsAuthor: Claude, TechFlow
TechFlow Intro: Seb, founder of Sophon, previously served as DeFi Lead at zkSync. A year ago, he raised $70 million to build his own chain using zkSync’s open-source zkStack. On June 25, he announced shutting down that chain and migrating to Base—a consumption-grade application platform built on OP Stack.
The SOPH token has plunged 94% from its all-time high, with a market cap under $20 million. Sophon is not alone: over the past two months, L2 projects including Zero Network, Syndicate Labs, Everclear, and Redstone have shut down in quick succession, while the top three chains now control roughly 75% of the market share. In this bear-market L2 elimination race, the contest has shifted from “whose technology is better” to “who has users.”
On June 25, Sophon updated its X (formerly Twitter) bio. It previously read “ZK-powered L2”; now it reads “All in on Apps.”
Those six words represent $70 million and one year of effort. Sebastien (pseudonym “Seb”), Sophon’s founder, posted a lengthy thread on X announcing the shutdown of Sophon’s L2 and the team’s full pivot to building consumer-facing applications on Base. Their first product, Pyre, has yet to launch.
Seb’s background adds deeper significance to this move.
According to The Block, Seb previously served as DeFi Lead at Matter Labs—the company behind zkSync. In 2024, he left zkSync and built the Sophon chain using zkSync’s open-source zkStack. The project raised $10 million in seed funding, followed by another $60 million from node sales—led by Binance Labs.
A year later, he shut down the zkSync-based chain and moved to Base—a chain built on OP Stack, with zero technical lineage to ZK technology.
$3.4 Million Annually to Maintain an Unused Chain
Per The Block, Seb revealed in an interview that Sophon’s annual chain maintenance cost totaled approximately $3.4 million—covering full-chain infrastructure, rollup services, data, and analytics. Shutting down the chain is expected to cut annual operating expenses by roughly $3 million.
In his announcement, Seb wrote that the team paused operations for nine months and asked themselves one fundamental question:
Did operating our own chain accomplish anything worth spending that money on? The answer was no.
According to CoinMarketCap (CMC), SOPH currently trades at ~$0.0047—down ~94% from its all-time high of $0.093 set in May last year. Its circulating market cap stands at ~$18.5 million—meaning the $3.4 million annual chain upkeep cost exceeds the entire circulating market cap of the SOPH token.
Even more awkward is the structural supply-demand imbalance.
According to a report by 21Shares released late last year, over 50 L2s are currently live—but Base, Arbitrum, and Optimism collectively process ~75% of total L2 transaction volume. Per Dune Analytics, Base alone accounts for over 80% of L2 transaction fee revenue. In 2025, Base generated $75.4 million in onchain revenue—62% of the total $120.7 million earned across all L2s. Coinbase, Base’s parent company, boasts 9.3 million monthly active transacting users—a distribution channel no other L2 possesses.
The barrier to launching a chain continues to fall. Following Ethereum’s Dencun upgrade in March 2024, L2 data publishing costs dropped significantly—lowering both the technical and capital barriers to launching a chain. The result? More chains, fewer users per chain. Seb put it bluntly in his announcement:
Every dollar spent on the chain is a dollar not spent on the product.
Three L2s Shut Down in One Day in May—A Wave of Closures Intensifies
Sophon isn’t the first L2 to shut down—and not even the first this month.
On May 21, three projects simultaneously announced shutdowns or cessation of development. As reported by CoinReporter: Zero Network—a gas-free L2 built by wallet firm Zerion using zkStack—confirmed closure after just 18 months of operation; Syndicate Labs—a rollup infrastructure firm backed by a16z with a $20 million raise—announced it would cease operations, citing a “fundamentally changed” rollup market; and Everclear (formerly Connext, a cross-chain settlement protocol once processing over $500 million monthly) also announced the shutdown of its foundation and product development.
Earlier, in April, Redstone L2 shut down. Its underlying team, Lattice, had operated for five years—and acknowledged in its shutdown statement that it “failed to identify a sustainable business model.” According to PANews, Redstone officially ceased operations on May 16.
These shutdowns share one common trait: technically functional, economically unsustainable.
Zero Network’s total value locked (TVL), per L2Beat, stood at ~$1.3 million—rated Stage 0. Everclear’s TVL on DefiLlama has dwindled to under $7,000, with zero transaction fee revenue in the past 24 hours. Following Syndicate’s shutdown announcement, its SYND token fell another 21% within hours—down ~99.5% from its September 2023 peak.
Ryan Yoon, Senior Analyst at Tiger Research, told Decrypt that the rollup infrastructure market has already consolidated around a handful of leading L2s—making builders increasingly inclined to adopt existing infrastructure rather than build new chains from scratch.
Mid-tier L2s still operating aren’t faring much better. Per CoinDesk, Linea’s bridge deposits fell from $976 million in November last year to $367 million in May this year—a decline of over 60%. Overall L2 TVL has dropped ~36% from its October 2023 peak of ~$50 billion.
Shut Down the Chain, Move to Base—Then What?
In an interview with The Block, Seb explained that Sophon chose Base because Base is building a blockchain economy targeting one billion users—and leads in agent-native economics (x402 protocol and surrounding infrastructure), aligning closely with Sophon’s product roadmap.
After migrating to Base, Sophon plans to roll out five products sequentially. First is Pyre—a gamified daily payments app launching next month. SophEarn, a standalone treasury product, will also launch next month. Sophon Play—targeting developers with Pyre’s gamification APIs—is scheduled for Q3. XP.app, a payment tool tailored for high-net-worth users, is slated for Q3–Q4. SophAI, an AI-focused product, remains in early development.
The role of the SOPH token has also evolved. As Seb described, SOPH is transitioning from a chain-specific gas token to a buyback-and-burn utility funded by product revenue. Revenue generated by Pyre, XP, SophEarn, SophPlay, and SophAI will be used to repurchase and burn SOPH tokens on public markets.
The problem? None of these products have generated revenue yet.
Pyre launches next month; the others follow later. How much of the original $70 million remains undisclosed by Seb. Per The Block, Seb stated that shutting down the chain saves ~$3 million annually—funds that will now be redirected directly toward app development and distribution.
And perhaps this reflects the current reality for most crypto projects: seeking lifelines, cutting costs, banding together—and waiting for a turning point.
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