StarkNet ZKX Ceases Operations Amid Low User Participation

by

As a seasoned crypto investor who has weathered numerous market cycles and witnessed the rise and fall of countless projects, I must say that the suspension of operations for the ZKX Protocol is yet another reminder of the volatile nature of this space. The lack of economic viability, low user engagement, and the constant threat of hacks and scams have become all too familiar narratives in our crypto journey.

The founders of ZKX Protocol, a derivatives platform built on Ethereum‘s Layer 2 scaling solution StarkNet, have announced that they will be halting operations due to financial struggles. Eduard Jubany Tur, the protocol’s founder, admitted that the current economic conditions were not sustainable for the project to continue.

Low User Engagement Plagues the StarkNet Engine

Eduard shared some unfortunate news about X, explaining that considerable effort has been invested to prevent this outcome. However, user participation in mining STRK and ZKX rewards is not substantial, leading to disappointing trading volume and daily income. In fact, the current revenue barely covers the cloud server expenses, let alone additional operational costs like salaries.

Important Statement 30.07.24

regretfully, it’s with heavy hearts that we must share the news of ending the ZKX protocol. Regardless of our diligent attempts, we haven’t found a financially sustainable way forward for this protocol.

(1) All markets have been delisted, positions have been closed and all…

— Eduard (@0xEduard) July 30, 2024

According to the ZKX protocol founder, tokens are currently being underappreciated due to a significant drop in demand. Additionally, there’s a growing feeling of burnout within the DeFi (Decentralized Finance) concept, which has been evident over the past five years and is impacting the entire industry.

Due to the termination of the ZKX protocol’s functioning, all markets were removed, all open positions were closed, and funds were returned to each user’s individual trading account. Yet, users retain the ability to move these funds from their trading accounts into their primary self-custodial wallets.

As an analyst, I’m sharing some important information about our transition process. It’s designed to progress smoothly and will conclude on August 31st. However, ZKX vesting and distribution can continue until September 1st, at which point it too will end. Given these details, I strongly advise all users to complete any necessary actions, such as withdrawing their funds, before the deadline on August 31st, which marks the end of this period.

Ethereum L2s Face Scam Attacks

Additionally, Eduard pointed out some concerns over minimal user involvement and interaction with StarkNet. Regrettably, this platform experienced several unauthorized intrusions and fraudulent attempts, which unfortunately have become increasingly common occurrences within the Web3 and cryptocurrency community.

Due to a recent hack on Metis’ Discord account, another Ethereum Layer 2 network, some security experts and users have reported suspicious activity. This type of incident can negatively affect the functioning of networks like Metis and ZKX.

As an analyst in the Layer 2 space, I find it detrimental for us to appear as if we’re quitting. Outfits like ZKX and Metis are instrumental in Ethereum staking, contributing significantly to its growth. However, any actions that might destabilize our ecosystem could potentially have a ripple effect on the performance of the parent chain in the future. It is crucial for us to maintain stability and continuity for the betterment of the entire blockchain network.

Read More

2024-07-30 20:20