Starknet's ZKX Protocol Shuts Down Due to Low Use
Starknet's ZKX Protocol is shutting down. The decision comes after the protocol struggled with low usage and a significant drop in the value of its token. Despite its potential, it couldn’t gain enough traction to stay afloat.
Starknet-Based ZKX Protocol Closes Due to Low Usage and Token Value
ZKX, the Starknet-based social trading platform, has officially shut down as of Tuesday and is instructing users to withdraw their assets before the end of the month’s transition period.
In a statement posted on X, ZKX founder Eduard Jubany Tur announced the closure with regret, citing the inability to secure a viable financial path despite their best efforts.
The platform has removed all markets, closed open positions, and returned funds to users. Individuals can now transfer their assets from ZKX’s self-custodial wallets on Starknet back to layer 1 through the available bridge at their convenience.
What are the Shutdown Reasons and Withdrawal Instructions for ZKX Users?
He highlighted that all trading markets have been removed, positions have been closed, and funds have been returned to users. Users can now withdraw their assets from their self-custodial ZKX wallets on Starknet using the bridge to layer 1 at any time.
“The sunset period will run through the end of August. After August 31st, ZKX’s vesting and distribution processes will continue. We strongly advise users to withdraw their funds and claim any pending STRK rewards before the end of the month,” Tur stated.
Tur explained that the decision to shut down was driven by several factors, including low user engagement and reduced trading volumes. These issues have led to daily revenue that is insufficient to cover cloud server costs and other operational expenses.
He also mentioned that the current value of the token makes it unsustainable to support the protocol. "The token generation event fell short of expectations, and the resulting losses have contributed to our current predicament," Tur added.
Funding Success and Challenges with Token Value Post-Airdrop
ZKX raised a total of $7.6 million through strategic investment rounds, with significant backing from key players in the crypto venture capital sector, including Flowdesk, Hashkey, Amber Group, Crypto.com, and StarkWare.
The ZKX airdrop, which started on June 19, aimed to reward active community members and early supporters. However, as often happens with airdrops, many recipients chose to sell their tokens shortly after receiving them.
Tur remarked, “As major holders decide to cash out, the token’s value has continued to fall. This undervalues the significant work and infrastructure developed by appchains and dApps within ecosystems like ours.”
