A16z-backed crypto startup Entropy to shut down, refund investors

Crypto start-up Entropy is closing down and handing funds back to investors, citing issues with scaling and struggling to find product-market fit.

Entropy founder and CEO Tux Pacific posted to X on Saturday that the crypto automations platform doesn’t have a viable path forward after years of operation.

“After four years, several pivots, and two rounds of layoffs, I’ve decided to wind-up Entropy and return capital to our investors,” Pacific said. 

Source: Tux Pacific

Entropy launched in late 2021 initially as a decentralized self-custody solution, with crypto venture capital giant Andreessen Horowitz backing it alongside Coinbase Ventures as part of a $25 million seed funding round in June 2022.

Pacific said that over the second half of 2025, Entropy was developing a crypto automations platform integrated with artificial intelligence, in a similar fashion to mainstream workflow platforms such as Zapier. 

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However, Pacific said that “after an initial feedback request revealed that the business model wasn’t venture scale, 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.”

Another a16z project hands back funding 

Entropy’s wind-up comes after the  a16z-backed decentralized social networking protocol Farcaster said on Thursday it would return $180 million in capital to investors amid a takeover by infrastructure provider Neynar.

Farcaster co-founder Dan Romero quashed rumours that the platform was shutting down via X, noting Neynar would steer the project in a more developer-focused direction, with Farcaster still having strong usage metrics. 

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