​ZKsync prematurely ends its liquidity rewards program, Ignite, citing bearish market conditions

ZKsync has prematurely ended its liquidity rewards program, Ignite, citing bearish market conditions and its transition toward an interconnected zero-knowledge ecosystem.

Despite having two more seasons planned for its popular liquidity rewards program, ZKsync has decided to shut down Ignite early.

The ZKsync DeFi Steering Committee (DSC) announced that it will not be extending the ZKsync Ignite program as they have achieved their initial objectives and are shifting their focus toward broader network expansion.

In a statement on X, DSC confirmed that Season 2 of Ignite will not continue, and the program will officially end on March 17. This also cancels the planned rewards distribution for the final sixth period of Season 1.

Announcing the closure of ZKsync Ignite program.

After five successful periods of the ZKsync Ignite program, we’re shifting our focus to broader network expansion.

We will not be continuing with Season 2 of Ignite, and the program will come to an official end on March 17, 2024.

As planned, the final period (6) of Season 1 will be canceled.

Launched in January 2024, Ignite was initially planned to run for nine months, distributing 300 million ZK tokens to liquidity providers in key trading pairs.

Season 1 was scheduled from January 6 to March 31, with an allocation of 100 million ZK tokens (~$21 million). However, the ZK token price fell from $0.22 to $0.070, reducing the expected reward pool to just $7 million.

ZK price dynamics for six months. Source: CoinMarketCap

“Current market conditions have a significant impact on the program’s long-term sustainability,” ZKsync stated.

Instead of continuing Ignite, ZKsync will be allocating resources to Elastic Network architecture, which aims to transform the platform into an ecosystem of interconnected ZK chains.

As we wrote, developers at Matter Labs, the creators of ZKsync, aim to compete with other major Ethereum Layer 2 solutions such as Arbitrum, Base, and Optimism. According to L2BEAT, these platforms account for over 80% of Ethereum’s total locked value.