ZKsync has canceled its liquidity rewards program “Ignite,” citing bearish market conditions.
ZKsync's DeFi Steering Committee (DSC) said it will not renew ZKsync Ignite, its liquidity reward program, as the project shifts its focus to broader network expansion.
The DSC confirmed that Ignite’s second season will not proceed and that the program will be discontinued on March 17. This also cancels the reward allocation for period 6, the final phase of the program’s first season.
ZKsync said it would focus its resources on its Elastic Network, an architecture that aims to transform the platform into an ecosystem of interconnected zero-knowledge (ZK) chains. “Our long-term vision for ZKsync is increasingly centered on the Elastic Network, and we want to focus our resources to accelerate this becoming a reality,” the project stated.
It said that pouring its resources into a single-chain program does not align with this interoperability goal.
Cointelegraph reached out to Matter Labs, the company behind ZKsync, for comment, but had received no response at the time of writing.
Navigating a bearish crypto market
The team acknowledged that current market conditions influenced the decision to end Ignite.
“To stay sustainable, we’re tightening our focus and spending smarter rather than fighting headwinds,” the team said.
ZK tokens performed well in 2024, reaching a high of $0.26 on Dec. 8. However, ZK prices failed to maintain their highs, experiencing continued sell pressure as market conditions worsened. The token currently trades at $0.06, a 76% drop from its price in December.
Related: ZKsync targets 10K TPS and sub-zero fees by 2025 roadmap goals
ZKsync Ignite boosted the project’s TVL to $270 million
According to ZKsync, the program surpassed its goal of driving DeFi total value locked (TVL) to $100 million. The program helped drive TVL to over $270 million, making trading on the chain more seamless. However, DefiLlama data shows that ZKsync’s TVL is currently down to $139 million.
The Ignite program originally planned to allocate 300 million ZK tokens in a span of nine months to DeFi users who would provide liquidity to key token pairs. The first season was scheduled from Jan. 6 to March 31, allocating 100 million tokens worth about $21 million during launch. At current ZK prices, 100 million tokens are only worth $6.8 million.
Apart from ZKsync, the broader crypto market is also experiencing an industry-wide downturn, with top crypto assets like Bitcoin and Ether struggling to maintain prices.
