On the evening of July 30, Eduard Jubany Tur, the founder of the ZKX derivative platform on Starknet Layer 2, announced that the ZKX protocol will officially cease operations at the end of August due to the low number of daily users, resulting in insufficient revenue to cover the project’s maintenance costs.
In the announcement, Mr. Tur stated that despite implementing attractive reward incentive programs, user participation remained very low. He shared:
We regret to announce that the ZKX protocol will be shutting down. Despite our best efforts, we have been unable to find a viable economic solution to sustain this protocol.
Mr. Tur also revealed that trading volume had significantly decreased since the launch, causing daily revenue to cover only a small portion of cloud server operating costs. Before the shutdown announcement, ZKX had just over 200 daily users with a trading volume ranging from $600,000 to $800,000, a sharp decline from over $30 million in March 2024.
At the time of writing, all markets on ZKX had been delisted, positions closed, and all funds returned to users’ trading accounts. Users can withdraw funds from their trading accounts to other Starknet wallets via the Starkway bridge. The shutdown phase will last until August 31, and the distribution of ZKX will continue after September 1. ZKX encourages users to withdraw their funds before the shutdown phase ends and to claim any remaining STRK rewards.
In addition to poor performance, ZKX faced economic challenges due to the sharp decline in the protocol’s token value. Mr. Tur shared:
It is undeniable that the token price at the time of TGE did not meet expectations, and user losses have contributed to our current situation. When large investors withdrew funds, the token value saw a steep decline.
He also expressed frustration, stating:
The market is currently undervaluing the efforts and infrastructure we have built for applications and dApps in our ecosystem.
ZKX had high expectations from the community, raising $7.6 million in a strategic funding round with participation from investors such as Flowdesk, GCR, and DeWhales. Additionally, ZKX received backing from major organizations like StarkWare, Amber Group, Huobi, and Crypto.com.
Related: What is StarkNet? Information About STRK Token
The closure of ZKX highlights the harshness of the DeFi market on the Starknet ecosystem. It seems the consequences of Starknet’s airdrop are becoming apparent, as the Layer-2 developer even insulted airdrop farmers as “internet beggars.”
Users are turning their backs on Starknet, with only about 11,000 daily active accounts on this network, making the collapse of ZKX inevitable.
