From Highlights to the Edge: The Bubble Burst of 8 Star-Backed VC Projects

In the encryption industry, every bull run gives birth to countless “highlight projects”: highly favored by top VCs, listed on mainstream exchanges, attracting numerous retail investors. But time is the sharpest touchstone; some projects have seen their prices fall by 90% or even over 99% compared to their peak, and the discussion around these projects has decreased year by year.

This article reviews 8 projects that were heavily invested in by star VCs and were highly anticipated during the bull run phase. From ICP to DYM, we will focus on analyzing their financing background, market capitalization changes, and the deeper reasons behind the fall — is it that the model is unsustainable? The ecosystem has yet to launch? Or are the competitors too strong and market demand insufficient?

Internet Computer（$ICP）

Once ranked in the top five, now has fallen by 99.5%

Internet Computer (ICP) was launched by the Dfinity Foundation, positioned as a decentralized “internet computer” that aims to enable smart contracts to natively run various internet services. The project development began in 2018, and it was launched in May 2021 at the peak of the bull run, entering the top five in cryptocurrency market capitalization on its first day, attracting significant market attention.

ICP is backed by top Silicon Valley VCs, including a16z, Polychain Capital, Multicoin, CoinFund, etc., with a total financing of 187 million dollars. The initial price of ICP reached several hundred dollars, peaking at nearly 700 dollars, but quickly fell after its launch, dropping below 20 dollars within two months. By 2025, ICP has long hovered around 3 dollars, down over 99% from its peak.

The main reasons for project failure include valuation bubbles, rushed launches, insufficient early liquidity, and external doubts about project governance and centralization. In addition, the slow progress of ecosystem development has not fulfilled the early promise of “reshaping the internet.”

Fuel Network（$FUEL）

The ambition of the modular execution layer has yet to be realized

Fuel Network is a layer two solution focused on Ethereum scalability, with the core goal of separating the execution layer from consensus and data availability to improve throughput and reduce costs.

The project has received support from institutions including Blockchain Capital, The Spartan Group, and CoinFund, with strategic financing reportedly reaching at least 80 million dollars.

However, in terms of token performance and ecological implementation, Fuel Network has not lived up to expectations. The current price of FUEL is approximately $0.003, with a market value of only tens of millions of dollars, having fallen over 94% from its peak. With Ethereum scaling solutions, various L2s, and modular chain solutions emerging one after another, it remains uncertain whether Fuel's differentiated advantages can be maintained in the long term.

Dymension ($DYM)

A new attempt at the RollApps architecture, with prices falling over 97%

Dymension is a project focused on “modular blockchain” infrastructure, aimed at enabling developers to quickly deploy application-specific blockchains ( “RollApps” ) L1 networks. Its design separates the consensus and settlement layers, and builds RollApps within the ecosystem to optimize scalability and customization.

The project was launched in 2022 and the token DYM is set to go live in early 2024. Despite having a clear technical positioning and support from several investment institutions such as Big Brain Holdings, Stratos, and Cogitent Ventures, the market performance shows that the current price of DYM has fallen over 97% from its peak. According to data, its historical high was close to about $8.50, and the current price is in the range of about $0.10. Although the project is still operational, the ecological development is slow, and community and user participation have not met expectations.

Flow（$FLOW）

Once a Star Chain of NFTs, Now Losing Attention

Flow is a high-performance public blockchain launched by Dapper Labs, focusing on NFT and gaming applications. In October 2020, the FLOW token was publicly listed on CoinList, and with the NFT boom in 2021, the ecosystem became quite active.

The financing lineup behind it is strong. Dapper Labs received multiple rounds of investment from institutions such as a16z, DCG, and Coatue between 2018 and 2021, with a total financing amount exceeding 18.5 million USD. The price of FLOW reached an all-time high of about $42 in April 2021, and then continued to fall with the market retreat. By 2025, the price had dropped to $0.28, a decline of over 96% from its peak, and the market value also shrank significantly.

The decline of Flow is closely related to the cooling of the NFT market. The ecosystem relies on a single hit application, lacking sustained growth momentum, and in the long run, it suffers from a lack of user retention and real demand support.

Yield Protocol

The fixed-rate protocol supported by Paradigm has been closed as of 2023

Yield Protocol is an Ethereum-based lending protocol that focuses on fixed-term, fixed-rate lending, and achieves bond-like lending products through the issuance of fyToken. The project was launched in 2019 and was once considered one of the pioneers in the DeFi fixed income sector.

In June 2021, Yield completed a $10 million Series A funding round led by Paradigm, with participation from well-known institutions such as Framework Ventures and CMS Holdings.

However, in October 2023, Yield Protocol officially announced the closure of the protocol, and the official website was subsequently taken offline.

The core reason for the project's failure lies in the insufficient demand for fixed-rate lending, making it difficult to maintain an effective market. At the same time, against the backdrop of a generally sluggish DeFi market and increasing regulatory pressure, Yield was unable to form a sustainable product model and ultimately chose to actively cease operations, becoming one of the few star VC-backed projects that formally closed in recent years.

Notional Finance ($NOTE)

A lending protocol that focuses on fixed interest rates is gradually being marginalized

Notional Finance is a fixed-rate lending protocol deployed on Ethereum, supporting users to borrow assets such as USDC, DAI, ETH, WBTC for a fixed term, attempting to fill the gap of “stable yield” products in the DeFi market.

In May 2021, Notional completed a Series A funding round led by Coinbase Ventures, with participation from top institutions including Polychain Capital and Pantera Capital, raising over $11 million.

As of 2025, the market value of NOTE tokens is only about 1.66 million USD, down over 99% from its peak, with a daily trading volume of less than a thousand yuan. The community activity and protocol update frequency are both relatively low.

The core issues encountered by Notional are similar to those of Yield Protocol: the user acceptance of fixed-rate products in the DeFi market has always been limited, lacking sufficient liquidity support. At the same time, its design differs significantly from mainstream lending protocols, leading to low user migration willingness and ultimately being gradually marginalized by the market.

DerivaDAO ($DDX)

From Star Derivative DEX to Margin Liquidation

DerivaDAO is a decentralized perpetual contract exchange project that was proposed in 2020, positioned as a derivatives platform that combines the operational experience of CEX with the security of DEX. The project emphasizes community governance and aims to replace centralized operations with a DAO format.

In July 2020, DerivaDAO received investments from top VCs such as Polychain, Coinbase Ventures, and Dragonfly, raising a total of $2.7 million. Although the amount is not large, the lineup is considered star-level. After its launch in 2021, the price once reached around $15 but quickly fell. By 2025, DDX has long hovered in the range of $0.01 to $0.04, with a decline of over 99% from its peak, and the project's market value has nearly gone to zero.

Due to the product not being launched for a long time and the lack of competitive features, coupled with the early aggressive mining incentive mechanism that led to the rapid release of tokens without actual trading demand to support it. At the same time, this track faces strong competitors such as DYDX, making it difficult for DerivaDAO to break through.

Eclipse（$ES）

New generation L2 infrastructure trial, retracement over 64%

Eclipse is a Layer 2 solution that combines the security of Ethereum and the high performance of Solana. The project will launch its mainnet in 2024 and the token ES in July 2025.

The project has received investments from well-known VCs including Placeholder, Hack VC, and Polychain Capital, with a financing scale of approximately 65 million USD.

However, from the market performance perspective, the valuation of the ES token has seen a significant retracement. According to CoinGecko data, although ES is still being traded, it has fallen sharply by about 64% from its peak. The Eclipse ecosystem is still in its early stages, with intense competition among Roll-up or modular chain solutions, and multiple projects are vying for the L2 track. The path for project market implementation has not yet fully emerged.

Conclusion

This article is not intended to criticize, nor to create emotions, but rather hopes to calmly review the “fall samples” from the last frenzy before the next cycle arrives.

They once had the most dazzling capital, narrative, and community—but still failed to escape the trajectory of decoupling, collapse, deceleration, and marginalization. In a market where finance and technology are highly intertwined, relying solely on financing, token prices, and topic popularity is far from enough. Does the business model hold? Can users be retained? Is the product continuously advancing? These are the core variables that truly determine the fate of a project.

These stories also remind us not to just pay attention to VC endorsements or short-term surges, but to also learn to identify whether long-term structures are in place.

When the tide goes out, what remains is the true value.