The a16z-backed company was never able to ramp up to its planned scale
Crypto start-up Entropy is shutting down operations and returning remaining funds to investors, ending a four-year run marked by multiple strategy changes and staff reductions. Founder and CEO Tux Pacific shared the decision in a post on X over the weekend.
I am winding-up Entropy.
After four years, several pivots, and two rounds of layoffs, I’ve decided to wind-up Entropy and return capital to our investors.
For the latter half of 2025, the Entropy team was hard at work on a crypto automations platform (basically n8n/zapier/etc…
— tux pacific (@__tux) January 24, 2026
Pacific said the company could not find a business model that could grow at the scale required for a venture-backed company. Despite continued development and experimentation, Entropy was unable to reach a point where long-term growth looked realistic.
Entropy launched in late 2021 with a focus on decentralized self-custody tools. The project gained early attention and backing from major names, including Andreessen Horowitz and Coinbase Ventures, which participated in a $25 million seed round in mid-2022.
Over time, the company shifted direction several times. In the second half of 2025, Entropy began building a crypto automation platform that blended blockchain tools with artificial intelligence, drawing inspiration from workflow products like Zapier.
Pacific said early user feedback showed interest, but made it clear the idea would not support venture-level returns. That left the team facing another pivot or a difficult decision to close the company altogether.
After two rounds of layoffs and several redesigns of the product, Pacific chose to wind down the business. He said the team had already explored its best ideas and that continuing no longer made sense.
Entropy’s shutdown follows a broader trend of crypto start-ups reassessing their futures. Earlier this week, a16z-backed Farcaster announced plans to return a large portion of its funding to investors after an infrastructure company took over parts of the project.
