Coinbase-backed Router Protocol to shut down, burn 303 million ROUTE tokens

Router Protocol, a cross-chain infrastructure project backed by Coinbase Ventures, will shut down all its operations by Sept. 30 after efforts to commercialize its products and stand out in a competitive bridging sector or find an acquirer failed to produce a sustainable business. 

The team announced the wind-down plan in a Friday statement on X after more than four years of development. Router said it had spent the past year pursuing commercialization, licensing and acquisition discussions but ultimately failed to find a way to sustain its operations.

"None reached an outcome that sustains a protocol team," the team wrote.

Router blamed capital shifting from crypto into artificial intelligence and lower fees for moving assets between blockchains as central challenges to its continuing operations. With activity concentrating on fewer networks and on standardized infrastructure, demand had fallen for its services, it said.

"Bridging economics are thin, compressing fees against costs that never sleep," the team wrote.

As part of the closure, Router plans to permanently burn 303,333,198 ROUTE tokens held in its treasury, about 30% of the token's nearly 1 billion total supply. Router will also work with centralized exchanges to end support for the token, though each exchange will likely have a separate delisting schedule and withdrawal procedure. 

The team said it would launch no further ROUTE-related programs and would be independent from any markets or liquidity pools created after the delistings, though the team plans to "open-source select components of what Router built, so that the engineering of the past four years remains available to anyone who wishes to build on it."

From Layer 1 launch to closure

Router raised $4.1 million in 2021 at an undisclosed valuation from investors including Coinbase Ventures and Polygon, The Block previously reported.

The project launched its own Layer 1 blockchain, dubbed Router Chain, in July 2024, a proof-of-stake chain that used the native ROUTE tokens for gas, governance, and security. However, Router had already moved to wind down the standalone blockchain in Sep. 2025, citing infrastructure costs, validator inflation, security risks, and the desire to focus on its Open Graph Architecture system, which connects bridges and other trading infrastructure.

The shutdown statement also described two security incidents in 2025. The team managed to recover 80% of the value back from a February exploit through negotiations, per their announcement, though funds lost in a separate chain-level exploit that July were not recovered. Router said all protocol fees had gone toward ROUTE buybacks and burns rather than accumulating in a treasury reserve.

Other crypto infrastructure developers have reported similar business pressures. Syndicate Labs, an Ethereum infrastructure provider focused on rollups and sequencers, announced its closure in May, citing a shrinking rollup market and a shift in demand towards customized chains. Bitcoin Layer 2 developer Botanix followed suit in June, saying transaction demand could not support its network's costs.