Sophon Shuts Down Layer 2 Network After $70M Funding Effort
Sophon pivots to Base network development following unsustainable operational costs for its standalone blockchain.
1Official Network Sunset Timeline
Sophon Chain has officially announced the permanent shutdown of its standalone Ethereum Layer 2 network scheduled for November 30, 2026. Users are strictly advised to bridge all liquid assets, including SOPH, ETH, and USDC, by the hard deadline of November 25, 2026, to avoid permanent loss of funds as infrastructure services go dark.
2Operational Cost Pressures
The decision to wind down the network stems from unsustainable financial burdens, with annual operational overhead exceeding $3 million. Despite securing $70 million in total funding, including a $10 million seed round and $60 million from a node sale in April 2024, the team concluded that maintaining standalone infrastructure was no longer economically feasible.
3Strategic Pivot to Base
Following the sunset of its dedicated chain, the Sophon team is shifting its focus toward developing consumer applications on the Coinbase-backed Base network. This strategic transition includes implementing SOPH token buyback and burn models, funded by the revenue generated from these new applications, marking a significant change in the project's long-term decentralized ecosystem strategy.
4Urgent Asset Withdrawal Instructions
Token holders must utilize official channels to claim outstanding staking and Guardian rewards, as well as any unclaimed farm assets. The team explicitly warned users to avoid last-minute withdrawals to prevent potential network congestion or technical complications, while also cautioning against phishing scams from fraudulent migration websites targeting users during this transition period.
5Market Performance and Valuation
The announcement of the network shutdown has severely impacted the SOPH token price, which hit an all-time low of $0.001623. This represents a decline of more than 98% from its peak price of over $0.11 recorded in May 2025, reflecting the market's reaction to the project's departure from its original standalone Layer 2 infrastructure model.
6Institutional Backing Context
Sophon initially launched as an entertainment-focused network powered by Matter Labs’ Zksync ZK Stack, attracting significant institutional attention during its 2024 expansion. Key investors included Paper Ventures and Maven 11, with additional strategic backing from Binance Labs. Despite this strong capital foundation, the project struggled to maintain the viability of its standalone blockchain architecture.
7Broader Ecosystem Consolidation
The closure of Sophon reflects a wider trend within the decentralized ecosystem, where numerous projects are reevaluating their infrastructure needs. More than 60 cryptocurrency companies, blockchains, and decentralized finance protocols have faced similar fates, either shutting down or filing for bankruptcy since early 2026, highlighting the intense pressure on standalone Layer 2 networks.
8Implications for Infrastructure Sustainability
The Sophon case underscores the critical challenge of balancing high initial capital raises with long-term operational sustainability in the blockchain sector. As projects face rising maintenance costs, the shift toward established networks like Base suggests a growing industry preference for shared infrastructure over the resource-intensive model of maintaining independent, standalone Layer 2 blockchain networks.
Original article: Bitcoin News — Sophon Shuts Down Layer 2 Network After $70M Funding Effort