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ZKX Protocol Suspends Operations Amid Low User Participation
ZKX Protocol, a derivatives protocol on Ethereum Layer 2 scaling solution StarkNet, has made the tough decision to suspend its operations. The protocol founder Eduard Jubany Tur acknowledged the lack of economic viability as the reason behind the latest development.
Low User Engagement Plagues the StarkNet Engine
Eduard announced the unfortunate situation on X, citing that a lot of effort has gone into preventing this eventuality. He stated that user engagement on the protocol is not impressive as only a few people mine STRK and ZKX rewards. In return, this relegated trading volume and daily revenue to the downside. It is so bad that the daily revenue hardly covers the cloud server expenses, how much more salaries, and other operational costs.
Important Statement
"We have to announce the discontinuation of the ZKX protocol. Despite our best efforts, we have been unable to find an economically viable path for the protocol." – Eduard (@0xEduard)
Tokens are Being Undervalued
"Tokens are being undervalued and there is a noticeable lack of demand. There’s a broader exhaustion of the DeFi paradigm as we have seen over the past five years and is affecting the entire sector." ZKX protocol founder explained.
Discontinuation of Operations
As a result of the discontinuation of ZKX protocol operation, the protocol went ahead to delist all markets, close all positions and returned all funds to each user’s trading account. However, users are still allowed to transfer the funds from their trading accounts to the main self-custodial account.
Transition Period
The transition is designed to go gradually and will come to an end on August 31. However, ZKX vesting and distribution is allowed to continue until September 1 when it would also cease. Hence, users are encouraged to carry out all necessary actions including withdraw their funds before the sunset period.
Ethereum L2s Face Scam Attacks
Apart from low participation and user engagement, Eduard also noted that the StarkNet protocol suffered a few hacks and scam attempts during its time of operation. Unfortunately, this hack attempts are fast becoming a trend in the Web3 and crypto ecosystem.
Conclusion
In conclusion, the suspension of ZKX protocol operations is a significant development in the Ethereum Layer 2 scaling solution StarkNet. The lack of economic viability and low user participation have led to this decision. The transition period will come to an end on August 31, and users are encouraged to carry out all necessary actions before the sunset period.
FAQs
Q: Why did ZKX protocol suspend its operations?
A: ZKX protocol suspended its operations due to lack of economic viability and low user participation.
Q: What happened to the user funds?
A: The protocol returned all funds to each user’s trading account, and users are still allowed to transfer the funds from their trading accounts to the main self-custodial account.
Q: What is the transition period?
A: The transition period will come to an end on August 31, and ZKX vesting and distribution is allowed to continue until September 1 when it would also cease.
Q: What is the reason behind the low user participation?
A: The reason behind the low user participation is the lack of demand and tokens being undervalued.
