ZKsync ends liquidity program amid market downturn

ZKsync (CRYPTO:ZK) has announced the termination of its liquidity rewards program, Ignite, citing challenging market conditions and a strategic shift toward long-term goals.

The program, which incentivised liquidity provision on the ZKsync network, will officially end on March 17, 2025, with no plans for a second season.

The decision was confirmed by ZKsync's DeFi Steering Committee (DSC), which stated that the program’s discontinuation aligns with the project’s focus on developing its Elastic Network.

This network aims to create an interconnected ecosystem of zero-knowledge (ZK) chains, prioritising scalability and interoperability.

“Our long-term vision for ZKsync is increasingly centered on the Elastic Network,” the team explained.

Ignite initially aimed to distribute 300 million ZK tokens over nine months to boost liquidity across decentralised finance (DeFi) platforms.

The first season, running from January 6 to March 31, allocated 100 million tokens worth $21 million at launch.

However, with ZK token prices dropping by 76% since December 2024, the current value of these tokens has fallen to $6.8 million.

The program successfully increased ZKsync’s total value locked (TVL) to $270 million during its peak.

However, TVL has since declined to $139 million, according to DefiLlama data.

The team acknowledged diminishing returns from Ignite and emphasised that continuing the program would divert resources from achieving broader interoperability goals.

The bearish crypto market further influenced this decision.

The ZK token has dropped by 35% over the past month, reflecting broader market trends as Bitcoin and Ethereum also face significant declines.

“To stay sustainable, we’re tightening our focus and spending smarter rather than fighting headwinds,” ZKsync stated.

Despite ending Ignite, ZKsync remains committed to its Elastic Network initiative, which aims to enhance DeFi scalability and connectivity.

The project also plans to settle all service contracts related to Ignite by March 30, 2025.

At the time of reporting, the ZKsync (ZK) price was $0.07177.