ZKsync’s DeFi Steering Committee has announced that it will discontinue ZKsync Ignite, its liquidity rewards initiative, as the project redirects its efforts towards a broader network expansion strategy.
The committee confirmed that the second season of Ignite will not take place, leading to the program’s termination on March 17. This decision also nullifies the reward distribution for the sixth period, which marked the conclusion of the program’s inaugural season.
ZKsync expressed its intent to concentrate resources on its Elastic Network, aiming to evolve the platform into a connected ecosystem of zero-knowledge (ZK) chains. “Our long-term vision increasingly revolves around the Elastic Network, and we aim to channel our resources into making this vision a reality,” the project noted.
The organization indicated that dedicating resources to a single-chain initiative does not support its goal of interoperability.
Attempts to contact the company behind ZKsync for further insights were unsuccessful at the time of writing.
### Adjusting to a Bearish Crypto Market
The team recognized that prevailing market conditions played a significant role in the decision to end Ignite.
“To ensure sustainability, we’re sharpening our focus and making smarter spending choices instead of battling against market headwinds,” they remarked.
ZK tokens had a strong performance in 2024, peaking at $0.26 on December 8. However, they struggled to hold onto their highs due to continued selling pressure, with the token now trading at $0.06—a substantial 76% decrease from its December value.
### ZKsync Ignite Raised the Project’s TVL to $270 Million
According to ZKsync, the Ignite program surpassed its initial objective of boosting the total value locked (TVL) in DeFi to $100 million, achieving over $270 million and facilitating smoother trading on the network. Nonetheless, recent data indicates that ZKsync’s TVL has fallen to $139 million.
The Ignite initiative was initially set to distribute 300 million ZK tokens over nine months to DeFi users who provided liquidity for essential token pairs. The first season was slated from January 6 to March 31, designating 100 million tokens worth approximately $21 million upon launch. However, at the current token price, the value of those 100 million tokens plummets to around $6.8 million.
In addition to ZKsync’s challenges, the wider cryptocurrency market is facing a general downturn, with leading assets like Bitcoin (BTC) and Ethereum (ETH) struggling to maintain their market prices.