A16z-backed Entropy to wind down after failing to find a venture-scale model

A16z-backed crypto startup Entropy is shutting down operations after struggling to build a business model that was “venture scale.”

Summary

• A16z-backed crypto startup Entropy is shutting down after concluding its business model could not scale to venture-level returns.
• All funds would be returned to investors as part of the wind-down process.

Founder and CEO Tux Pacific, who launched the company in late 2021, said the team has run out of viable options and doesn’t see a path forward.

Entropy started as a decentralized custody platform backed by Andreessen Horowitz, alongside other major names like Coinbase Ventures and Dragonfly Capital, which led a $25 million seed funding round in 2022.

According to Pacific, over the course of four years, the company went through several pivots before settling on crypto automation. Over the second half of 2025, the team developed a crypto automations platform integrated with artificial intelligence that aimed to serve as a decentralized alternative to mainstream tools like Zapier.

However, as Pacific explained, an “initial feedback request revealed that the business model wasn’t venture scale,” prompting the decision to shut down and “return capital to our investors.”

“I was left with the choice to find a creative way forward or pivot once more. After four hard years working in crypto, I decided that the best I could do has already been done. It was time to close up shop,” Pacific said.

Pacific, in the meantime, has decided to exit the crypto space and begin exploring opportunities in pharmaceuticals.

A string of failures

Entropy’s shutdown adds to a broader wave of crypto project closures that swept across 2025. For instance, in March, NGC Ventures-backed Linear Finance also shut down after prolonged financial difficulties and a sudden Binance delisting that rendered the project unsustainable.

Across the Web3 gaming space, Ember Sword, an Ethereum-based massively multiplayer online role-playing game, shut down only a few months after it launched its early access. It joined the ranks of other high-profile shutdowns, such as Deadrop, Nyan Heroes, and Tatsumeeko, among others, that had struggled to survive a brutal funding environment and poor user engagement.