MilkyWay Protocol has announced that it will gradually phase out its operations and has decided to permanently shut down the protocol.
The statement indicated that the failure of expected demand and adoption in decentralized finance (DeFi) and the WayCard product’s delay in alleviating financing pressures were decisive factors in this decision.
MilkyWay recalled that it started as the first liquid staking token (LST) developed for Celestia, expanded over time to the Initia and Babylon ecosystems, and later experimented with restaking, tokenization of real-world assets (RWA), and neobank-like products.
However, the team stated that the DeFi ecosystem matured slower than expected, interest in restaking waned quickly, and planned collaborations on the RWA side could not be realized due to unforeseen reasons. They also argued that the WayCard product, which focuses on daily expenses and rent payments, failed to achieve product-market fit due to limited “runway.”
As part of the protocol’s closure process, all features will be disabled starting today, and the system will be completely shut down after the designated closure date. MilkyWay also announced that it will return the protocol revenue it earned to its users. The majority of the revenue came from liquid staking fees, with the protocol taking 10% of these fees. During the closure process, these accumulated protocol fees will be converted to USDC and distributed proportionally to MILK token holders.
It was stated that a single on-chain “snapshot” was taken for the distribution and completed as of January 14, 2026 at 13:00 (UTC+3). The snapshot includes MILK balances, MILK stakers, liquidity providers, and tokens held on exchanges across the MilkyWay L1, BSC, and Osmosis networks. It was added that transfers made after the snapshot will not affect entitlement. USDC distribution will be automatic; users will not need to go through a separate claim process. For users holding MILK on centralized exchanges, coordination has been established with the relevant exchanges, and distribution will be done through the exchanges.
MilkyWay also announced that all remaining tokens reserved for the team, foundation, community, and ecosystem, including any undistributed airdrop shares, will be burned and will not enter circulation.
The MilkyWay token, MILK, has fallen by 6% in the last 24 hours and by 42% in the last month.
*This is not investment advice.
