Decentralized platform ZKX is shutting down due to economic difficulties and low user engagement

Decentralized finance platform ZKX, supported by major crypto exchanges Crypto.com and Huobi, announced the termination of its activities. The main reason for the closure was insurmountable economic difficulties and low community engagement.

ZKX co-founder, Eduard Jubani Tur, said that in recent months the protocol has faced a sharp increase in threats, constant hacking attempts and fraud. These factors, along with declining user interest and lower trading volumes, have significantly impacted the platform's revenue.

Despite the active efforts of market makers, ZKX's expenses exceeded its revenues, and the team was unable to find an economically viable way to further develop the protocol.

Thus, the ZKX platform was forced to shut down despite initial support from major players in the cryptocurrency industry.

ZKX platform closes down and returns funds to users

Decentralized finance platform ZKX has delisted all trading pairs and closed positions, returning users' funds to their trading accounts. Customers can now transfer their assets to self-storage accounts on the Ethereum Starknet sidechain using the Starkway Bridge. The protocol wind-down process will last until the end of August, and the distribution of remaining funds will continue after September 1.

Founded in 2021, the ZKX platform initially received significant backing from blockchain company StarkWare, Amber Group, cryptocurrency exchanges Huobi and Crypto.com. Investors included notable figures such as Polygon co-founder Sandeep Nailwal and DragonFly Capital general partner Ashwin Ramachandran.

ZKX's closure reflects a general trend in the decentralized finance industry. Last year, Algofi's largest project on the Algorand blockchain ceased operations, and Clockwork, a smart contract automation project for the Solana network, closed in August 2023 due to low commercial interest.