ZKsync Discontinues Its Liquidity Reward Program Ignite

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.

ZKsync will not be renewing its ZKsync Ignite liquidity reward program as the project shifts its focus to broader network expansion, the DeFi Steering Committee (DSC) confirmed.

The DSC said 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.

The project said it would be concentrating 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. This interoperability goal is not well-served by pouring our resources into a single-chain program."

A Matter Labs spokesperson, the company behind ZKsync, was contacted for further comment by Cointelegraph.

The team also 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.”

ZK tokens have been performing poorly in 2024, with the token reaching a high of $0.26 on December 8. However, ZK prices failed to maintain their highs, with the token seeing continued sell pressure as market conditions worsened. The token is currently trading at $0.06, a 76% drop from its price in December.

The Ignite program was originally planning to allocate 300 million ZK tokens over a period of nine months to DeFi users who would be providing liquidity to key token pairs. The first season of the program was set to run from January 6 to March 31, allocating 100 million tokens, which comes to about $21 million during launch. At current ZK prices, 100 million tokens are only worth $6.8 million.

According to ZKsync, the program has already surpassed its goal of driving DeFi total value locked (TVL) to $100 million. The program helped to drive TVL to over $270 million, which would make trading on the chain more seamless. However, according to DefiLlama, ZKsync’s TVL is currently down to $139 million.

According to a recent report by the Block, Harvest Finance (FARM) was the most-funded project on ZKsync. The report stated that Harvest Finance received over $60 million in a single transaction on ZKsync, which is the largest single crypto transfer of 2024 so far.

The program was also going to see the allocation of 300 million ZK tokens over a period of nine months to DeFi users who would be providing liquidity to key token pairs. The first season of the program was set to run from January 6 to March 31, allocating 100 million tokens, which comes to about $21 million during launch. At current ZK prices, 100 million tokens are only worth $6.8 million.