Hyli Shutdown: ZK Layer-1 Closes With No Token Launch

The Hyli shutdown reads as a clean exit, not a collapse. The project never sold a token, so no holder is watching a coin fall today. Instead, the team is closing a funded startup that built working tech but never found a market.

Why Hyli Is Shutting Down

According to the team, the market shifted after the project started. ZK technology also failed to gain the traction they expected. In their view, strong engineering alone could not carry the project forward.

The official account put it plainly in its announcement.

Unfortunately, technical achievements are not all you need. The market has changed a lot since we started, ZK has not gained the traction we had hoped for, and we don’t see a viable path to launching Hyli in the current environment.

So the reason is market fit, not a hack or a missing feature. The team named no funding crisis, no internal dispute, and no broken code. That framing matches the calm tone of the post itself.

Sylve Chevet, the co-founder and CEO, led the project through that arc. The post set no wind-down date, so the closure appears immediate. Still, the team left clear next steps for its code and its people.

What Hyli Built Before the Hyli Shutdown

Hyli launched around mid-2024 as a ZK-first Layer-1. The design treated zero-knowledge proofs as the core building block, not an add-on. As a result, app logic ran off-chain while the chain verified compact proofs on-chain.

Developers could write that logic in Rust, Noir, or other systems. The chain supported several provers, including SP1, Risc0, and Noir. Because proving ran off-chain, on-chain costs stayed low and predictable.

The team also built a full Rust node client from scratch. It used Autobahn BFT consensus for speed. By early 2026, Hyli had reached a private mainnet and called itself production-ready for regulated finance partners.

The team even shipped playful demos along the way. One, called CacheCash, ran a faucet mini-game with private token transfers. It used SP1 and Noir proofs to show confidential transactions in action.

That work stayed active until the end. The last release, v0.15.0, shipped on March 27, 2026. Public repo activity continued as recently as June 3, just one week before the shutdown.

Funding and Early Backers

Hyli, then styled Hylé, raised $3.4 million in a seed round in May 2024. Framework Ventures led a $2.6 million portion of that round.

The cap table read like a who’s who of ZK and security. Backers included StarkWare, Succinct Labs co-founder Uma Roy, and Ledger co-founder Nicolas Bacca. Cherry Crypto, Fabric Ventures, First Capital, and Heartcore Capital also joined.

The team aimed that capital at European regulated actors. The pitch paired privacy with auditability, so institutions could settle confidentially yet still prove correctness. Despite the backing and the clear niche, the demand never arrived.

The Code Stays Open Source

The team promised to leave its work in public hands.

Everything we have built will remain open-source on our github repo.

The main repos stay public and unarchived. They include the Rust node client, the block explorer, and the developer hub. So other builders can study or fork the Autobahn-based client and the prover integrations.

The founders also opened a door for their team. They asked hiring managers to reach out for engineers, operators, and marketers. In short, both the people and the code stay in the ecosystem.

A Wider ZK Reality Check

The Hyli shutdown does not stand alone. Several ZK and infrastructure projects scaled back across 2025 and 2026. ZKsync Lite, for example, heads for deprecation in 2026.

Other closures cited economics rather than broken tech. ZeroLend wound down its DeFi protocol in February 2026 over economics and security. Together, these moves point to a harder market for pure infrastructure bets.

Hyli’s own words fit that trend. The team said ZK had not gained the traction it expected. So the closure reads less like a one-off and more like a signal about timing.

What Happens Next After the Hyli Shutdown

As of June 10, no tier-1 outlet had covered the story. CoinDesk, The Block, and Bloomberg had not weighed in, so this remains an early, X-native report.

The community response stayed small but warm. Builders thanked the team for sunsetting before a token, not after. The honesty drew more respect than the closure drew criticism.

Some developers summed up the mood directly. One, posting as @0xluffyn, called it sad to see but praised the open-source move. Another, @Nomo_derek, wished the team luck on its next idea.

For now, the open repos are the clearest legacy. Anyone tracking ZK settlement can watch who forks the code next. That signal, more than any farewell post, will show whether Hyli’s bet was early rather than wrong.