Zero Network Ends Operations as Ethereum Layer 2 Projects Face Market Pressure

Zero Network, an Ethereum Layer 2 project focused on enabling fully gasless transactions, is shutting down after operating for roughly 18 months, according to an announcement made by its parent company, Zerion on Thursday.

The decision reflects the growing pressure facing blockchain infrastructure projects, particularly within the increasingly crowded Ethereum scaling ecosystem, where many teams are struggling to maintain sustainable growth and long-term adoption.

Zerion Ends Development of Zero Network

In a statement shared on social media platform X, the Zero team said it would discontinue the ZERϴ Network in order to concentrate resources on Zerion’s core products, including its API services and crypto wallet ecosystem.

According to the team, the project was originally launched with the ambition of creating the first fully gasless, EVM-compatible rollup network. The initiative aimed to simplify blockchain interactions by removing gas fees entirely, making decentralized applications easier for mainstream users to access and use.

Zero Network officially launched in November 2024 as part of a broader wave of Ethereum Layer 2 solutions attempting to improve scalability, reduce transaction costs, and streamline user experience.

However, the company ultimately concluded that operating a standalone blockchain network was not the most effective way to achieve those goals.

The team stated that its future strategy will prioritize products already used daily by its existing customer base, rather than maintaining independent blockchain infrastructure.

Users Asked to Withdraw Assets Before July Deadline

As part of the shutdown process, the company confirmed that user funds remain secure and accessible.

At the same time, the team advised users to bridge all assets, including ETH, NFTs, and other tokens, out of the Zero Network before the end of July. Incoming transfers into the network have already been disabled as the winding-down process begins.

Founded in 2016, Zerion is primarily known for operating Zerion Wallet, a self-custody crypto wallet available through mobile applications and browser extensions.

Crypto Infrastructure Closures Continue Across the Market

Zero Network’s closure comes amid a broader wave of shutdowns affecting digital asset infrastructure projects and crypto startups in recent days.

Earlier the same day, cross-chain infrastructure company Everclear announced plans to shut down its protocol operations, user interface, foundation, and research divisions.

Meanwhile, Syndicate Labs also confirmed it was ending operations, alongside blockchain-based trading card platform Fantasy.top.

Several of these companies pointed to difficult market conditions, reduced funding availability, weaker user activity, and ongoing challenges in monetizing blockchain infrastructure products as key reasons behind their closures.

Ethereum Layer 2 Competition Intensifies

The shutdown also highlights the increasingly competitive nature of the Ethereum Layer 2 landscape.

Over the past two years, dozens of rollups and scaling protocols have entered the market, including optimistic rollups, zk-rollups, appchains, and modular blockchain solutions. While many promised lower fees and better user experiences, only a limited number have managed to achieve meaningful network activity or sustainable revenue generation.

As capital becomes more selective and investor expectations shift toward profitability and real-world usage, smaller infrastructure projects are finding it harder to justify maintaining independent blockchain ecosystems.

The industry has also seen growing consolidation trends, with companies redirecting focus toward wallets, APIs, developer tooling, custody services, and institutional infrastructure instead of launching entirely new chains.

Market Is Entering a Consolidation Phase

The closure of Zero Network is another indication that the digital asset sector may be entering a more mature consolidation phase after years of aggressive infrastructure expansion.

During the previous market cycle, launching a new Layer 2 or blockchain network was often viewed as a growth strategy on its own. Today, however, the market appears to be rewarding products with proven utility, recurring users, and sustainable business models rather than experimental infrastructure alone.

Projects focused solely on scaling technology are now competing in an overcrowded environment where differentiation has become increasingly difficult. In contrast, companies offering consumer-facing products, institutional services, or integrated ecosystems appear better positioned to survive prolonged market pressure.

Zero Network’s shutdown does not necessarily invalidate the gasless blockchain concept itself, but it demonstrates how difficult it has become for standalone networks to sustain momentum without large-scale adoption, liquidity, and long-term economic viability.