ZKX plunges 50% as protocol winds down services due to low user demand
crypto.news + 1 more 31 July 2024 10:03, UTC ZKX protocol, the first perpetual futures exchange on Starknet, has ceased operations due to the lack of user engagement.
ZKX protocol (ZKX), a decentralized perpetual futures trading platform based on Starknet (STRK), is winding down its operations as it faces economic challenges due to minimal user engagement.
Important Statement 30.07.24
With much regret, 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.
(1) All markets have been delisted, positions have been closed and all…
— Eduard (@0xEduard) July 30, 2024
In an X post on July 31, ZKX Protocol founder Eduard Jubany Tur expressed his regret over the decision, citing the inability to find “an economically viable path for the protocol.” The decision to halt operations stemmed from multiple factors, Tur said, referring to minimal user engagement and significantly reduced trading volumes.
“Our user engagement has been minimal, with only a few individuals mining STRK and ZKX rewards. Consequently, trading volumes have significantly decreased, and daily revenue can barely cover a fraction of our cloud server expenses.”
Tur on July 30
The ZKX Protocol founder also added that the project delisted all markets and closed positions, with funds now returned to “each user’s trading account.” Tur urged users to move their funds from trading accounts to their self-custodied wallets, with the closure period set to last until the end of August.
Following the news, the price of the ZKX token plunged by over 50% and is trading around $0.015, per data from crypto.news.
Founded in 2021 by a team led by Tur, Naman Sehgal and Vitaly Yakovlev, ZKX Protocol’s primary idea was to bring derivatives trading to the decentralized finance ecosystem using zk-rollups based on Starknet.
In July 2022, ZKX Protocol raised $4.5 million in a seed funding round. The investment came from a pool of investors, including StarkWare, Alameda Research, Huobi, Amber Group, and Crypto.com, among others. In total, the protocol secured $7.5 million.
