ZKX Protocol, a derivatives trading platform on Starknet, has shut down due to minimal user engagement and insufficient funds.
Points
- ZKX Protocol struggled with low user engagement and trading volumes.
- The protocol’s daily revenue couldn’t cover operational
expenses.
– Users have until the end of August to withdraw their funds.
– Recent funding rounds could not sustain the protocol.
ZKX Protocol, a derivatives trading platform on Starknet, has shut down. Founder Eduard Jubany Tur announced the closure on July 31, citing a lack of an economically viable path forward for the protocol.
Tur noted minimal user engagement and decreased trading volumes as key reasons for the shutdown. Despite efforts to boost participation through rewards programs, daily revenue couldn’t cover basic operational expenses like cloud server costs.
https://x.com/0xeduard/status/1818206251089551810
This closure follows a $7.6 million strategic funding round on June 19, with contributions from investors like Flowdesk, GCR, and DeWhales. Previous investors included Hashkey, Amber Group, Crypto.com, and StarkWare. Despite this recent funding, the protocol struggled with the value of its ZKE token. Tur admitted that the token generation event （TGE） did not meet expectations, leading to financial losses. Major token holders cashing out further contributed to the token’s declining value.
Tur also pointed to the “broader exhaustion” in the decentralized finance （DeFi） sector as a factor in the decision to shut down. The price of the protocol’s native ZKX token fell 37.8% in the last 24 hours and is currently trading at $0.02, according to CoinGecko data. The ZKX token is down 96.4% from its all-time high of $0.62, which it notched a day after its launch on June 20.
The shutdown of ZKX Protocol highlights the challenges faced by DeFi platforms amid declining user engagement and token value. Despite recent funding, the protocol could not sustain operations in the current market environment.