Starknet-based ZKX protocol shuts down, blaming the lack of users
The ZKX protocol – a social derivatives trading platform built on the Ethereum Layer-2 network Starknet – has been closed, the founder said that there is no “economically viable” future for the protocol.
In a July 31 post for X, ZKX founder Edward Jubani Toure wrote that the protocol's user participation was “low,” noting that only a few individuals were running the protocol's rewards program.
They added that transaction volumes are “drastically reduced” and that the protocol's daily revenue from cloud servers can only cover a “fraction” of their costs.
Tur said ZKX canceled all markets, closed all positions and returned all funds to users' trading accounts. Users have until the end of August to transfer funds from their wallets to the protocol's main self-sustaining account.
This comes a month after the ZKX protocol raised $7.6 million in funding from a strategic round on June 19, which saw contributions from investors including Flodesk, GCR and Dewhals.
Previous investors in the protocol include Hashkey, Amber Group, Crypto.com and StarkWare.
Tur added that there is no way to “sustainably support” the value of the ZKE token, which recently launched the protocol, at its current price.
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“There's no denying that TNG has fallen short of expectations, and the resulting losses have contributed to our current situation. As major token holders exercise their right to cash out, the value of the token continues to decline,” he said.
Tur blamed “widespread weakness” in the decentralized finance (DeFi) sector.
The price of the protocol's native ZKX token has fallen by 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 high of $0.62 a day after its launch on June 20.
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