Starknet-Based ZKX Protocol Shuts Down Citing Low Usage and Token Value

The ZKX team said the decision to halt operations was partly due to low user engagement, while the current value of its token wouldn’t be able to sustain the protocol.

ZKX, a social perpetual trading platform built on Starknet, ceased operations as of Tuesday and asked users to withdraw funds until the conclusion of the sunset period at the end of the month.

“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,” said ZKX founder Eduard Jubany Tur in a statement on X.

He noted that all markets have been delisted, positions closed, and funds returned to users’ trading accounts. Users will be able to withdraw funds from their self-custodial ZKX accounts, which are wallets on Starknet, through the bridge back to the layer 1 at any time.

“The sunset period will last until the last day of August. ZKX vesting and distribution will continue after sunset on September 1st. We strongly encourage everyone to withdraw their funds before sunset through August and claim any pending STRK rewards,” he said.

Tur attributed the decision to shut down to several factors, including low user engagement, and dwindling trading volumes. This corresponds to a daily revenue figure that fails to cover cloud server expenses, leave alone other operational costs, he said.

“There’s no way to sustainably support the protocol with the current value of the token either. There’s no denying the TGE [token generation event] didn’t meet expectations, and the resulting losses have contributed to our current situation,” said Tur.

The price of ZKX was trading at $0.018 at the time of writing, down 38% over the last 24 hours. The token’s price is down 97% from its all-time high of $0.62 last month, according to data from CoinGecko.

In total, ZKX raised $7.6 million from strategic investment rounds, that included participation from big names in the crypto venture capital space such as Flowdesk, Hashkey, Amber Group, Crypto.com, and StarkWare.

The ZKX airdrop went live on June 19 and was meant to reward active community members and early adopters. But as the story goes with most airdrops, a large number of those who received tokens chose to sell what they were allocated.

“As major token holders exercise their right to cash out, the token’s value has continued to decline. The market is undervaluing the work done and infrastructure built by appchains and dApps coming from ecosystems like ours,” said Tur.