ZKX co-founder Eduard Jubany Tur said that the protocol has seen a sharp increase in threats in recent months, with persistent hacking and fraud attempts. The decision to shut down is also due to a decline in user interest and trading volumes, which has had a significant impact on ZKX’s revenue. Despite the efforts of market makers, the platform’s expenses have outpaced its revenue, and the team has been unable to find an economically viable path forward for the protocol.
“User engagement was minimal. Only a few people were receiving rewards in STRK and ZKX. Consequently, trading volumes dropped significantly and the daily income barely covered our cloud server costs. The market undervalued the work and infrastructure we had put in,” Toor laments.
All trading pairs on ZKX have already been delisted, positions have been closed, and user funds have been returned to their trading accounts. Clients can transfer funds from trading accounts to their self-custody accounts on the Ethereum sidechain Starknet. Withdrawals can be made via the Starkway Bridge. The protocol wind-down will last until the end of August, and distribution of funds will continue after September 1.
The ZKX platform was founded in 2021. The protocol has previously received support from blockchain company StarkWare, Amber Group, cryptocurrency exchanges Huobi and Crypto.com, as well as Polygon co-founder Sandeep Nailwal and DragonFly Capital general partner Ashwin Ramachandran.
Last year, the largest decentralized finance project Algofi, created on the basis of the Algorand blockchain, ceased operations. In August 2023, the project for automating smart contracts for the Solana network, Clockwork, closed due to low commercial interest.
Source: Bits
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