Entropy, a cryptocurrency startup, is set to wind down operations and refund its investors due to its inability to find a scalable business model. Founder and CEO Tux Pacific made the announcement via X, indicating that after four years of various strategic shifts and two layoffs, the company could not find a path forward.

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

Initially launched in late 2021, Entropy garnered backing from prominent venture capital firms such as Andreessen Horowitz and Coinbase Ventures, raising $25 million as part of its seed funding in June 2022. Over the past months, the company aimed to develop an innovative crypto automation platform similar to widely-used workflow tools like Zapier.

However, feedback indicated that their business model lacked the potential for rapid growth, leading Pacific to conclude that the endeavors have reached their limits.

Closure of Another a16z Project

Entropy’s shutdown follows the recent announcement by Farcaster, another a16z-backed project, stating it would return $180 million to investors amid a transition in management. Co-founder Dan Romero clarified via X that although changes are underway, usage metrics for Farcaster remain robust.