The digital asset market underwent a sharp reset in 2025 as token failures reached record highs across the industry.
Data from CoinGecko showed that 53% of all tokens listed since 2021 are now inactive, with most failures recorded during 2025.
The scale of token inactivity highlighted how fragile many projects became once market conditions tightened.
Unlike earlier cycles, widespread liquidations in October erased billions of dollars in leveraged positions.
The sell-off exposed projects that depended heavily on liquidity rather than genuine user demand.
As liquidity dried up, many tokens effectively ceased to function as tradable assets.
“Looking back at the projects that went quiet in 2025, many confused liquidity for demand,”
Chris Loeffler said.
“Weak distribution, token incentives that only worked in bull markets, and hidden centralised dependencies created the illusion of strength. When volatility hit, transparency and risk controls were thin, and treasuries weren’t built for runway. The projects that held up tended to have real utility, reliable infrastructure, aligned incentives, and a compliance-aware posture,”
Token saturation intensified during 2025 as launch tools reduced barriers to issuance.
The number of tokens listed on GeckoTerminal surged from about 428,000 in 2021 to more than 20 million by the end of 2025.
“By 2025, more than 11 million tokens died, but most were created in minutes with no team or product,”
Santiago Roel Santos said.
“Counting these as failed projects is like counting scratch-off tickets as failed investment theses,”
Meme coins accounted for a large share of failed projects as social hype faded and liquidity thinned.
Research suggested that roughly 99% of Web3 projects still lacked consistent cash flow.
Many teams relied on token reserves to fund operations, leaving them exposed once prices stopped rising.
As token supply grew faster than users and capital, attention alone was no longer enough to sustain projects.
By late 2025, the market began to reward measurable utility rather than speculative narratives.
Projects with strong fee generation relative to token emissions proved more resilient during the downturn.
Networks that generated organic user fees outperformed those reliant on incentives.