According to Bertram, the key reasons were lower regulatory pressure in the United States and slower growth of new decentralized applications, which had previously driven demand for governance tools.
Decentralization as a defensive strategy
Bertram noted that the SEC’s tougher stance under Gary Gensler had effectively pushed many crypto projects toward decentralization. That gave them a way to reduce the risk of having their tokens classified as securities. In that context, DAOs and governance tools served not only a technical purpose, but also a regulatory one.
With the political climate becoming more favorable toward the crypto industry, that pressure has eased. As a result, many projects no longer view decentralization as a necessary structural requirement.
The market did not develop as expected
Another reason behind Tally’s shutdown is that the market evolved differently from what many had anticipated. Instead of expanding into thousands of new protocols and Layer-2 networks, the ecosystem became concentrated around a relatively small number of dominant projects.
Although crypto found product-market fit in areas such as payments and speculative trading, broad adoption of decentralized applications never fully materialized. That, in turn, limited long-term demand for governance infrastructure.
Stepping away from DAO models is becoming a trend
A similar pattern is now visible across other projects. Across Protocol, for example, proposed moving away from its DAO structure in favor of a traditional U.S. corporation. Jupiter and Yuga Labs have also already reduced the role of decentralized governance in their ecosystems.
In Bertram’s view, this points to the lack of a sustainable business model for DAO governance services at the current stage of market development.
Conclusion
Tally’s closure reflects a broader shift: interest in DAOs as a governance model is fading as regulation changes and the market becomes more concentrated. At this stage, decentralization is no longer seen as a mandatory framework for many crypto projects, while DAOs themselves are moving from the center of the ecosystem toward a more niche role, relevant only in selected cases.
