Bybit, one of the largest cryptocurrency exchanges in trade volume, has recently revealed its plan to wind down a range of its Web3 offerings. This order has opened up a pretty fascinating discussion within the crypto community. Now, people are asking why it happened and thinking about how it will affect centralized exchanges that are moving to the decentralized space. The exchange is shutting down a number of Web3 trading functions and focusing its resources on more widely used services. This article discusses what might have driven Bybit to reach this conclusion. It researches the dropped services, why they made the decision, and what that means for consumers and the future of Web3 adoption through centralized platforms.
Bybit's Web3 Service Closures: A Detailed Overview
Bybit's decision involves the discontinuation of a range of Web3 services, reflecting a strategic shift in its approach to decentralized technologies. Services being cut fit into two broad buckets. These are ones that are poorly adopted and ones that are related to Web3 trading workflow. An understanding of these very specific services is critical to understanding the extent of and possible influence of Bybit’s decision.
Services with Limited Adoption
Bybit has decided to discontinue a number of Web3 products and services that attracted minimal levels of user activity. These include:
- NFT Pro: A platform for trading and managing Non-Fungible Tokens (NFTs).
- Inscriptions Marketplace: A marketplace for trading inscriptions, a type of digital artifact embedded on blockchains.
- ApeX: A decentralized derivatives exchange.
- IDO (Initial DEX Offering): A platform for launching new crypto projects through decentralized exchanges.
- Buy Crypto: A service that allowed users to purchase cryptocurrencies. This service was already phased out on April 8, 2025.
Their low adoption across the platform shows they haven’t caught on with Bybit’s user base. Consequently, these services have not produced the levels of activity they’ve needed to create. There are a number of reasons that might explain why. These challenges range from inordinate competition with entrenched incumbents, to low user awareness, to issues showcasing the technical feasibility of implementing these services.
Discontinued Web3 Trading Features
Along with the services mentioned above, Bybit is phasing out a number of Web3 trading functionalities. These include:
- DEX Pro Platform: A platform for trading on decentralized exchanges.
- Swap & Bridge Service: A service that allowed users to swap tokens across different blockchains.
- NFT Marketplace: A platform for trading NFTs. This service was already phased out on April 28, 2025.
The end of these trading features is a sign of the times, as firms pull back from providing full-service Web3 trading capabilities. This decision results from a thoughtful reconsideration of the dangers and benefits associated with providing these services. There is equally strong incentive to focus on core competencies in the centralized exchange realm.
Potential Contributing Factors: Unpacking the "Why"
Any number of reasons might be behind Bybit’s decision to scrap its Web3 offerings. These include the alleged hack, a strategic refocusing on core competencies, and the need to address security concerns in the Web3 space. All three of these factors are important in understanding the rationale behind Bybit’s move.
The Shadow of the Alleged Hack
Rumors and speculation abound as to a possible security deployment or hack, but some in the crypto community have already pointed to a possible security breach. Bybit has not publicly acknowledged a hack. Yet the timing of their service closures has raised eyebrows and led to the theory that this closure was retaliatory as a response to a security incident that may have affected their choice. For what it’s worth, it’s important to note that this is all just speculation and that Bybit’s public statements have always emphasized other driving influences.
Assuming a hack did happen, that’s something that would have had a huge impact on Bybit’s risk appetite for its suite of Web3 services. The risk of both financial loss and reputational harm from security breaches in the decentralized world is huge. In this situation, Bybit would have taken the smart move to cut back or eliminate their Web3 product line to avoid getting burned again.
Strategic Refocusing: Back to Core Competencies
Another potential explanation for the service closures is a strategic refocusing on Bybit's core competencies as a centralized cryptocurrency exchange. Bybit now enjoys a strong reputation as the go-to place for spot trading, derivatives trading and a variety of other centralized finance offerings. The company may have concluded that its resources are better allocated to strengthening these core areas rather than pursuing ambitious Web3 initiatives.
This strategic pivot intends to greatly increase their profitability. Along with that, it aims to increase the quality of user experience and establish itself as a serious competitor among Centralized exchange market. Bybit is consolidating to double down on its core competitive advantages. This strategy is part of its broader plan to ensure that it remains a central player in the crypto sphere.
Addressing Security Concerns in Web3
The Web3 space is still plagued by security issues, from smart contract exploits to phishing scams and rug pulls. Bybit may be scaling back its Web3 services to address these security concerns and protect its users from potential risks. The biz has probably decided that protecting a safe Web3 landscape requires too great expense and hassle. Yet, they argue, these challenges are more than enough to outweigh any benefits.
Part of this decision may stem from regulatory pressures, and the growing scrutiny of Web3 actions by federal and other regulators on the frontier. In response, Bybit is scaling back its engagement with the decentralized realm. Action to reduce regulatory uncertainty and administrative burdens while still adhering to all relevant laws and regulations.
The User Impact: Navigating the Changes
Of course, Bybit’s determination to end its Web3 infrastructure services will most severely affect its users. So it’s very important to understand what it could mean for you and how Bybit is responding to this shift to make the transition as seamless as possible. To help customers recover assets post-deadline, the company has launched a Remediation Program.
Impact on Users of Discontinued Services
Users of the now-defunct Web3 services need to pivot fast. They need to find other forums to do what they’re trying to do. You may have to move funds to different exchanges. Think about moving NFT stamp NFTs over to other NFT marketplaces or using them to gate participation in IDOs on new platforms.
As such, Bybit has a duty to diligently communicate and assist users throughout this transition. We will give plenty of advance notice about the changes in service. Our team members will lead you through the process of withdrawing your assets and finding options that work better for you.
Remediation Program: Supporting Asset Recovery
Bybit has introduced a comprehensive remediation program designed to help customers recover their assets even after the service closure deadline has passed. This program’s intent is to make sure users are not left holding the bag with assets they can’t use. Finally, communicate clearly the details of the remediation program to users. This means spelling out eligibility requirements and what claiming an asset entails.
Remediation program needs to be effective and worthwhile. We look forward to seeing it play a leading role in mitigating the harms caused by these service closures to Bybit’s users. Devil’s in the design—and execution. A properly designed and efficiently executed pilot program goes a long way to protecting user trust and avoiding future complaints or litigations.
The Future of Centralized Exchanges and Web3: A Crossroads
Bybit's decision to scale back its Web3 services raises important questions about the future of centralized exchanges and their engagement with the decentralized space. If true, the move may be indicative of a larger trend of exchanges recalibrating their Web3 plans and doubling down on their areas of strength.
Reassessing Web3 Strategies
Centralized exchanges have been experimenting with various Web3 initiatives, including offering access to DeFi protocols, NFT marketplaces, and other decentralized applications. Unfortunately, the success of these initiatives has been hit or miss, with many exchanges currently re-evaluating their strategies.
A perfect storm of forces are dragging this reassessment kicking and screaming into the light. These range from difficulties integrating Web3 technologies with existing centralized infrastructure, regulatory ambiguities in the decentralized realm, to attracting and retaining users in an intensely competitive landscape.
Focusing on Core Competencies
Centralized exchanges are maturing at breakneck speed. Their future competitive advantage is no longer unique tech successful development of high quality low cost trading services – what a regulated exchange can offer. You need to focus on areas that are your strengths — spot trading, derivatives trading and custody solutions. Don’t get distracted building grand Web3 projects—do what you do better.
This shift in focus can leave room for a large divide between centralized and decentralized platforms. Each will serve different parts of the crypto market. Their goal is to make a simple, easy-to-use and regulated environment that brings on-board the mainstream user. Decentralized platforms, on the other hand, lure in more advanced and risk-tolerant users that value self-custody and censorship resistance.
Lessons Learned: Security and Responsibility in Web3
Bybit’s experience serves as a timely reminder of the need for security and responsible practices within the emerging Web3 space. Exchanges are particularly susceptible to hacking and loss of funds. If they want to project an image of safety and security, they need to protect their users’ assets. For them, real-time monitoring and automated vulnerability detection drives automated security. Beyond that, they highlight the need for formative research on Web2 and Web3 interactions.
Real-Time Monitoring and Vulnerability Detection
Real-time monitoring and automated vulnerability detection across protocols play a critical role in curbing large-scale financial losses as the space scales to Web3. All Exchanges, both state and federally facilitated, should be required to deploy aggressive security solutions with advanced threat detection capabilities to help reduce potential vulnerabilities. You’ll be actively monitoring deployed smart contracts for vulnerabilities and/or exploits. You’ll even identify fraudulent transaction trends and set up automated triggers to alert fraud protection teams of potential breaches.
Integrating with cloud providers like AWS and leveraging their security tools can significantly enhance an exchange's ability to detect and respond to security threats. With the ability to set real-time alerts and act fast, security teams can minimize damage before it occurs.
Understanding Web2 and Web3 Interactions
Without this, it’s impossible to fine-tune security solutions for the unique environments of both Web2 and Web3. Not to mention that most Web3 platforms still require Web2 infrastructure just to operate — think user authentication, data storage, payment processing. These interactions create new potential, unintended attack vectors that need to be rigorously considered and protected against.
Exchanges must be held responsible for instituting strong security throughout their multiple Web2 infrastructures and their Web3 lines of business. This will help facilitate encrypted data transfer between the FHIR and non-FHIR environments. To start, this means adopting the strongest encryption protocols, implementing robust multi-factor authentication, and continuously auditing their security systems.
"Shift Left" Approach to Security
By addressing security issues as early as possible in the development process with a “Shift Left” approach, organizations can mitigate risks at a lower production cost. Embed security into each phase of the software development lifecycle. Take it from design and planning all the way through coding and testing.
To this end, exchanges can dramatically reduce the chance of costly security breaches by identifying and addressing vulnerabilities in advance. This forward-looking step will help make sure that their platforms are secure by default. This critical approach does not end there, but instead calls for a pervasive security culture and a deep commitment to continuous improvement.
Prioritizing Security Responsibility
By making security a core responsibility and adopting best practices from traditional finance, Web3 platforms can significantly improve their security posture. Pass default waiting periods for large transfers of funds. You will implement tiered account structures, with different levels of authorization, and implement other proven security practices from the legacy financial sector.
By implementing these internal practices, exchanges can help mitigate the risk of unauthorized or compromised transactions and safeguard their customers from the threat of fraud. Every Web3 platform needs to keep the need for security front and center. We believe it’s time for exchanges to commit to protecting their users’ assets in any way they can.
Bybit’s decision to slash its Web3 services is a valuable reminder of the difficulties of combining centralized and decentralized technologies. Whatever the reason for the move, it has led to speculation. Clearly security concerns, strategic refocusing and the desire to address regulatory uncertainties were huge factors as well. Centralized exchanges are changing web3 and accepting the changes of the dynamic world. Bybit’s experiences will give critical lessons that inform their strategies moving forward and further preserve their user’s safety and security.
