Crypto’s Grand Circus: Entropy’s $25M Farewell Waltz

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  • Ah, the grand spectacle of capitalism! Crypto startup Entropy, once a darling of the decentralized dream, has decided to bow out gracefully, returning its remaining capital to the backers who once believed in its utopian vision. How noble, how… predictable.
  • Four long years of toil, of pivoting from decentralized custody to AI-driven crypto automation, only to realize the market is as unforgiving as a Siberian winter. Tux Pacific, the mastermind behind this endeavor, now turns its gaze to hormone delivery for women and transgender health. A noble cause, indeed, but one wonders if they’ll fare better than in the crypto circus.
  • Tux Pacific, once a player in the crypto arena, now exits stage left, leaving behind a trail of what-ifs and could-have-beens. The crypto space, it seems, is no place for the faint of heart-or the underfunded.

In the grand theater of the absurd that is the crypto world, Entropy has decided to close its curtains. Once hailed as a beacon of innovation in the decentralized custody space, it now joins the ranks of the fallen, a cautionary tale of ambition and miscalculation.

Four years of navigating the tempestuous seas of market cycles, of chasing the ever-elusive “venture scale,” have led to this moment. Unlike the many projects that vanish into the ether, Entropy exits with a modicum of dignity, returning capital to its investors. A rare gesture in a world where greed often trumps grace.

The Rise and Fall of a Crypto Dream

Born in the heady days of late 2021, Entropy set out to challenge the likes of Fireblocks and Coinbase with its decentralized custody solution. Multi-party computation, the buzzword of the hour, promised users greater control over their funds. It was a vision that lured even the mighty Andreessen Horowitz into leading a $25 million seed round in June 2022. Coinbase Ventures and Dragonfly Capital followed suit, bringing the total haul to $27 million. A war chest, one might think, to conquer the crypto frontier.

entropy is shutting down after raising $25m in a seed round led by a16z back in 2022.

four years of building, the founder decided the business model “wasn’t venture scale” and chose to return capital to investors.

in just four years, the narrative shifted so hard that nobody…

– Mertcan (@merttcanc)

But the crypto market, ever fickle, soon became a crowded battlefield. Institutional custody, once a promising niche, was overrun by giants. Entropy, despite its pivots and layoffs, found itself lost in the shuffle. The team’s efforts to stay relevant were akin to Sisyphus pushing his boulder-each attempt met with new challenges, each pivot a step closer to the precipice.

The Final Gambit: Crypto Automations

In a last-ditch effort, Entropy turned to AI-driven crypto automations, a platform akin to Zapier or n8n but tailored for the blockchain. Threshold cryptography promised to simplify transaction signing, making crypto workflows as mundane as office tasks. But the market, it seems, was not impressed. Early feedback was as harsh as a winter storm, and the business model was deemed too small for its lofty ambitions.

Faced with the stark reality of irrelevance, Tux Pacific had to choose: pivot yet again or admit defeat. After four years of struggle, the founder chose the latter, closing the chapter on Entropy with a rare act of integrity-returning capital to its backers.

The Venture Capital Tightrope

Entropy’s decision to refund its investors is not an isolated incident. As the crypto market matures, such acts of financial contrition are becoming more common. Farcaster, another Andreessen Horowitz-backed project, recently returned $180 million to its investors. A sign of the times, perhaps, as the crypto winter freezes out all but the hardiest of ventures.

🚨 BIG MOVE: Farcaster’s parent company will return $180M to VCs, signaling a rare liquidity event post Neynar acquisition.

– The Crypto Times (@CryptoTimes_io)

The venture capital landscape has grown harsher, with crypto deals plummeting by 60% last year. Investors now favor late-stage companies with proven revenue models, leaving early-stage startups to fend for themselves. For Entropy, the writing was on the wall-better to exit with grace than to burn through reserves in a futile struggle.

And so, the curtain falls on Entropy, a tale of ambition, hubris, and the cruel realities of the crypto market. Tux Pacific, meanwhile, turns its gaze to new horizons, leaving behind a legacy of what could have been. In the grand circus of crypto, the show must go on-but for Entropy, the final act has been played.

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2026-01-26 19:59