thedefiant.io
Terminal Finance, a highly anticipated decentralized exchange (DEX) incubated by Ethena Labs, is canceling its launch after the Converge blockchain, its intended base layer, failed to go live – showcasing the risks DeFi projects face when relying on untested infrastructure.
The DEX was designed specifically for Converge, an institutional-focused blockchain co-developed by Ethena Labs and Securitize. With the network still not launched and no clear timeline, the Terminal Finance team said it could not move forward.
The Defiant reached out to Terminal Finance and Ethena Labs for comment but did not receive a response by press time.
“The Converge chain never went live as expected, and a launch doesn’t appear to be planned for the near future,” Terminal Finance’s team said in a post on X. “This left us with deposits and a fully built protocol, but without the ecosystem it was designed for.”
The decision highlights the risks decentralized finance (DeFi) projects face when they depend on new or untested blockchain infrastructure. Even fully developed and funded protocols cannot launch if the underlying chain is delayed.
Tara Annison, Head of Product at Twinstake, told The Defiant that building on a pre-mainnet chain is risky because core features often change, launch dates frequently slip, and documentation is usually incomplete – all of which make development difficult.
“The good teams will focus on developer communication and coordination to try and make this as painless as possible, but it's always going to be more challenging to build on something that itself is still in build rather than an established chain,” Annison said.
Moreover, experts say Converge flopping isn’t unusual in crypto. “Failed launches remain common in crypto, especially DeFi,” Kadan Stadelmann, Chief Technology Officer, Komodo Platform, told The Defiant.
Annison added that new projects, chains, and narratives launch constantly, and many don’t scale for the same reasons startups in any sector fail: funding shortages, weak product-market fit, strategic missteps, team issues, or shifting market conditions.
“This isn't the first crypto project/chain to have a failed launch, and it won't be the last,” Annison said. “It's a consequence of an industry that moves 1 million miles an hour and anyone building or investing in the industry knows (or should know) these risks when they get involved.”
The Terminal/Converge situation is part of a broader pattern in DeFi, where projects and investors face risks from untested infrastructure or assets.
Recent events, such as the collapse of Elixir’s deUSD token and temporary withdrawal pauses on Compound, show how quickly liquidity and confidence can be affected when the underlying system experiences stress.
Experts note that such events don’t undermine DeFi as a whole, but they do reset the risk premium. Investors are now more cautious about protocols that rely on untested infrastructure or complex mechanics, said Trevor Koverko, co-founder of Sapien.
Koverko added that the market is in a “recalibratory phase” and projects should prepare for funding slowdowns and leverage adjustments, even as the long-term outlook for crypto remains strong.
The news regarding Converge comes as Ethena Labs has faced heightened attention in recent weeks after its synthetic dollar USDe lost roughly 40% of its market cap following the Oct. 10 market crash. Currently, USDe’s market cap stands at just over $7 billion, according to CoinGecko.