The ZKX Protocol, a social derivatives platform built on the Ethereum Layer-2 network Starknet, has ceased operations. Founder Eduard Jubany Tur announced the closure on July 31st, citing a lack of user engagement and economic viability.
Low User Numbers and Declining Revenue Cited
In a post, Tur revealed minimal participation in the protocol’s rewards program and a significant decrease in trading volume. This translated to insufficient daily revenue to cover even a fraction of cloud server expenses. As a result, the platform has delisted all markets, closed positions, and initiated a user fund withdrawal process. Users have until the end of August to transfer funds from their trading wallets to the protocol’s main account.
This news comes as a surprise considering ZKX’s successful $7.6 million fundraising round just a month ago, backed by investors like Flowdesk, GCR, and DeWhales. Previous rounds saw participation from heavyweights like Hashkey, Amber Group, Crypto.com, and StarkWare.
Tokenomics Woes Deepen the Wound
Tur pointed to the disappointing performance of the ZKX token, launched in June 2024. The token’s value failed to meet expectations, leading to significant losses upon token holders cashing out. This downward spiral further worsened the protocol’s financial situation.
Broader DeFi Market Conditions Play a Role
Tur also acknowledged the broader challenges facing the Decentralized Finance (DeFi) sector, potentially contributing to ZKX’s struggles.
ZKX Token Price Plummets
The native ZKX token price reflects the project’s fate. It has dropped a staggering 37.8% in the last 24 hours and sits at a meager $0.02, a far cry from its all-time high of $0.62 reached just a day after its launch. This represents a near 96.4% decline.
The closure of ZKX serves as a reminder of the competitive landscape within the DeFi space. While innovative projects emerge frequently, attracting users and building a sustainable economic model remain critical challenges.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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