Web3 security firm Harpie recently announced its closure, marking the end of its mission to create a theft-free crypto ecosystem. Despite receiving significant backing from major investors such as Coinbase Ventures and OpenSea, the company struggled to establish a sustainable business model, leading to its shutdown on March 27.
In a statement shared via a Twitter thread, Harpie expressed gratitude to its users and acknowledged the challenges it faced in generating enough revenue to support its operations. The firm advised users to disconnect their wallets from the Harpie RPC to prevent failed transactions and assured participants of its referral program that outstanding rewards would be honored.
Harpie had raised $4.5 million in funding in 2021, with Dragonfly Capital leading the investment round. Initially charging a 7% fee on recovered assets, the company later shifted to a fixed 0.01 ETH fee per recovered asset in an attempt to adjust its revenue model. Despite these efforts, Harpie was unable to achieve long-term financial stability.
The closure of Harpie reflects the broader struggles faced by Web3 security startups in monetizing their services effectively. While the demand for on-chain security solutions remains high, the decentralized nature of the crypto space and user preference for self-custody solutions have made it challenging for companies like Harpie to thrive.
This trend of closures extends beyond the security sector, with companies in the NFT space also facing financial difficulties. LG Electronics recently announced the closure of its NFT platform, LG Art Lab, citing shifting strategic priorities. The NFT market has experienced a significant decline in trading volumes, leading to the shutdown of platforms such as Kraken and Nike’s RTFKT NFT venture.
Despite these challenges, Ethereum and Bitcoin continue to dominate the NFT market, but overall trading activity has struggled to reach previous highs. The downturn in the NFT market highlights the long-term sustainability challenges faced by digital collectibles.
As Harpie exits the market, it leaves room for other innovators to continue working towards keeping crypto secure for all users. The closure of Harpie serves as a reminder of the difficulties faced by startups in the crypto and NFT sectors, emphasizing the importance of sustainable business models in a rapidly evolving industry.