Decentralized Finance Platform ZKX Protocol ceases operations
Decentralized finance trading platform ZKX Protocol is shutting down due to insurmountable economic challenges, as confirmed by a statement from co-founder Eduard Jubany Tur. Tur mentioned the difficulties in maintaining a DeFi community driven by token incentives, along with a rise in threats and abuse, hacking attempts, and scams.
- Tur expressed regret over discontinuing the ZKX protocol despite their best efforts to find an economically viable path forward.
- All markets on ZKX have been delisted, and positions closed with funds returned to users’ trading accounts.
- Users can transfer funds from their trading accounts to their self-custodial accounts on Starknet, with withdrawals facilitated through the Starkway Bridge.
Reasons Behind the Shutdown of ZKX Protocol
Tur noted that declining user engagement and trading volumes impacted ZKX’s revenue streams significantly. The lack of user engagement led to minimal mining of STRK and ZKX rewards, resulting in decreased trading volumes and inadequate daily revenue to cover expenses.
- Market-makers’ efforts were not enough to offset the costs surpassing revenue, leading to the decision to shut down operations.
- The economic challenges faced by ZKX were compounded by the token’s poor performance and major token holders cashing out, causing a decline in token value.
- Tur highlighted the undervaluation of the work done by appchains and dApps on ecosystems like theirs within the market.
Background and Support for ZKX Protocol
ZKX was founded in 2021 with the goal of creating a scalable decentralized exchange for perpetual trading. The platform received backing from notable entities like StarkWare, Amber Group, Huobi, and Crypto.com, along with support from individual investors such as Sandeep Nailwal and Ashwin Ramachandran.
- Despite demonstrating the viability of their model and building robust infrastructure on Starknet, ZKX faced challenges due to the overall exhaustion of the DeFi market.
- Tur shared the initial aspirations of building perp app chains that could scale like a centralized exchange while offering the benefits of a decentralized exchange.
- He expressed gratitude towards the Starkware team and the Starknet Foundation for their contributions to the development process.
- The ZKX community served as both a source of support and pressure throughout the platform’s journey.
Hot Take: ZKX Protocol’s Closure Reflects DeFi Market Challenges
The shutdown of ZKX Protocol sheds light on the ongoing challenges faced by decentralized finance projects in a rapidly evolving market environment. Despite the platform’s efforts to innovate and engage users, economic hurdles and declining market dynamics ultimately led to its closure. The story of ZKX serves as a reminder of the importance of adaptability and resilience in the DeFi space, where projects must navigate various obstacles to achieve sustainable success.
By
By
By
By
By
By