ZKX plunges 50% as protocol winds down services due to low user demand

The first perpetual futures exchange on Starknet, the ZKX protocol, has ceased operations due to lack of user participation.

Starknet (STRK)-based decentralized perpetual futures trading platform ZKX protocol (ZKX) is shutting down its operations as it faces economic difficulties due to minimal user participation.

Important Statement 30.07.24

It is with great regret that we must announce the termination of the ZKX protocol. Despite our best efforts, we were unable to find an economically viable path for the protocol.

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

— Eduard (@0xEduard) July 30, 2024

ZKX Protocol founder Eduard Jubany Tur expressed regret over the decision in an X post on July 31, citing the failure to find an “economically viable path for the protocol.” Tur said the decision to cease operations was due to a multitude of factors, citing minimal user engagement and significantly reduced transaction volumes.

“Our user interaction was minimal, with only a few people mining STRK and ZKX rewards. As a result, transaction volumes were significantly reduced and daily revenue was only partially covering our cloud server expenses.”

Tour on July 30

The ZKX Protocol founder also added that the project has delisted all markets and closed positions, with funds now returning to “each user’s own trading account.” The tour urged users to move their funds from their trading accounts to their own wallets, with the shutdown scheduled to last until the end of August.

ZKX/USD 1-hour price chart, July 17-31 | Source: crypto.news

Following the news, the price of the ZKX token dropped by over 50% and is trading around $0.015, according to crypto.news data.

Founded in 2021 by a team led by Tur, Naman Sehgal, and Vitaly Yakovlev, the core idea of ​​ZKX Protocol was to bring derivatives trading to the decentralized finance ecosystem using Starknet-based zk-rollups.

In July 2022, ZKX Protocol raised $4.5 million in a seed funding round. The investment came from a pool of investors including StarkWare, Alameda Research, Huobi, Amber Group, and Crypto.com. The protocol raised a total of $7.5 million.