You are scrolling through X (formerly Twitter) or LinkedIn.

Every other post says: "Successfully raised $2M in pre-seed", or "Protocol update completed", or "10K NFTs sold out in 30 minutes."

Success stories have flooded social media with new partnerships, associations, funding and investments.

However, there may be something that you might not notice amidst all these positive stories.

How the founders, whose treasury dried up almost overnight. How the teams that built for a year realised that their product was never in market demand. And, how many DAOs were fractured over governmental regulations?

This is the kind of story that the internet never reveals. The silence around failure, especially in Web3, has become systemic.

In a sphere where innovation, decentralisation and radical transparency are rewarded, some founders are utterly terrified to admit when things take an unexpected turn.

What could be the result of it? A toxic culture that is filled with unrealistic expectations and repeated mistakes.

Constantly stuck in a loop where everyone is pretending to be "making it" when they are slowly running out of fumes and quietly burning out.

Is Failure a Bug?

Despite being in 2025, Web3 remains experimental in many aspects.

Yes, we are building in real-time, but in volatile markets, with regulations that are uncertain and technology so fast-paced and dynamic.

Failure is only inevitable in this environment. From failed tokenomics to lost liquidity, from exploits to community backfire, Web3 projects are navigating failures endlessly.

To make things for the better or worse, they heavily depend on founder trust rather than the technology used or their products. This influence can steer the market and the token price and sway the consumer in many favourable ways.

Take Tesla as an example. With Elon Musk's single tweet, stock prices can move drastically.

Tesla lost $150 billion in market cap after its recent clash with Donald Trump.

All it took was a single apology from Musk that quickly restored the price.

Now, here is the contrast: founders still treat failure like a shameful secret, rather than what it is — a valuable feedback mechanism.

Is it a Collective Amnesia?

So, what happens when founders do not talk openly about their failures?

Well, the simple answer is that the ecosystem fails.

Lessons Never Get Passed on:

There is a possibility that others may follow suit with an idea when they are not expecting or anticipating certain pitfalls that you may have experienced as you walked through that path.

The others in the system, unaware of these hitches, may walk into the trap, or worse, fall blindly into it.

Be it bad token models, unsustainable staking mechanisms or even misguided DAO structures.

Communities Lose Trust:

Besides the deliberate and malicious exits, there are further threats in the Web3 space.

As communities are the major stakeholders, who contribute time, money and often social capital by participating in a project, a founder's retreat can only leave the community confused and disappointed.

As if it is sending a message to the community that they did not deserve an explanation, as in why the founders had to leave the project.

Mental Health Struggles:

The crash can often lead to experiencing isolating and silent struggles as they fail to make it.

Without space for vulnerability and shared failure narratives, burnout becomes normalised. This results in anxiety to fester, and they would start associating personal worth with the outcomes of their startups.

Without support and encouragement, cracks will develop in the credibility and the loyalty they managed to garner from the community.

Case Studies in Failure (Followed by Silence)

1. Terra (LUNA) and the UST Collapse (2022)

The collapse of stablecoin Terra and its sister token Luna in 2022 wiped out an estimated half a trillion USD from the cryptocurrency markets.

In May 2022, Terra experienced a cryptocurrency equivalent of a bank run, where depositors lost confidence in the tokens and all rushed for the door simultaneously.

By May 16, the Terra stablecoin and Luna token were all but dead, with some media outlets labelling it a Ponzi scheme while others referred to it as a rug-pull scam.

2. The DAO Hack (2016)

DAO (Decentralised Autonomous Organisation), established in 2016 on the Ethereum blockchain, had successfully raised $150 million in Ether (ETH) through a token sale.

Unfortunately, it fell victim to a hack that exploited the vulnerabilities in its code.

To recover the stolen funds, the Ethereum blockchain underwent a hard turn, which turned out to be controversial. This eventually led to the split between Ethereum and Ethereum Classic, two separate blockchains.

3. Mirror Protocol (2021)

Due to existing vulnerabilities in the price oracles, the Mirror Protocol faced a major exploit in 2021, resulting to a loss of over $2 million.

This was preceded by a hack that had drained around $90 million. To prevent further losses, the protocol quickly disabled targeted assets that were on the brink of collapse.

The situation raised significant concerns about the protocol's security and future viability.

Building Culture Equals Giving Voice to Failures

In a healthier Web3 culture, failure can take a different step to help transition it to a better outlet for prospective founders.

Normalise Failure Analyses:

Public retrospective should be normalised. Employing tools like Mirror, GitHub, or Notion can accommodate detailed breakdowns.

This could include what went wrong and what was learnt. This would certainly help founders in a similar track to prevent themselves from falling into the same chasms.

Founders Leading by Example:

With larger failures in the system, the more prominent names get discussed.

If founders like Balaji Srinivasan or Jesse Walden ever spoke up about their missteps and pivots, this would result in inspiring smaller, lesser-known voices to embrace their failures and to find inspiration to seek help.

This won't lead to just building better companies, but better decision-making minds and hands.

More Resilient Web3 Ecosystem:

The nature of the ecosystem is highly volatile, and considered to be still in the early stages and adventurous and experimental.

This is why talking about missteps would help normalise course correction and prevent other founders from repeating similar mistakes.

This can contribute to a more sustainable ecosystem where the guide incorporates wins and lessons from failures, as well.

Let's Redefine Success

Building in Web3 is difficult. Sometimes, you have no roadmaps, just sheer passion and will.

Experimenting in the ecosystem and allowing failures to take their space will not only help the system to mature but also to find a collective approach to look at it and creative means to resolve it.

So, survive, pivot and return! Because, in Web3, the real flex is in fearless resilience.

Edited by Annette George