ZKSYNC Sunset Liquidity Plan in Bearish Market

ZKSYNC’s DEFI Steering Committee (DSC) said it will not renew its liquidity rewards program’s Zksync Ignite as the project shifts focus to a wider network expansion.

DSC confirmed that the second season of IGNITE will not be underway and that the plan will be suspended on March 17. This also cancels the reward allocation for the final stages of the program’s first season.

Zksync says it will focus its resources on its resilient network, an architecture designed to transform the platform into an ecosystem of interconnected zero-knowledge (ZK) chains. “Our long-term vision for ZKSYNC is increasingly focused on resilient networks, and we want to concentrate resources to accelerate this reality,” the project said.

It said dumping its resources into a single-chain plan does not align with this interoperability goal.

Cointelegraph contacted Matter Labs, the company behind Zksync, for comment, but received no response at the time of writing.

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The team acknowledged that the current market conditions affected the decision to end the ignition.

“To remain sustainable, we are tightening our focus and being smarter than hitting the headwind,” the team said.

ZK Token performed well in 2024, reaching $0.26 on December 8. However, as market conditions worsen, ZK prices failed to maintain high prices and continued sales pressure. The token is currently trading at $0.06, down 76% from its December price.

Related: ZKSYNC targets 10K TP and below zero fees with 2025 roadmap target

Zksync Ignite raises TVL for the project to $270 million

According to Zksync, the plan exceeded its goal of increasing the Defi Total Value Lock (TVL) to $100 million. The plan has boosted TVL to more than $270 million, making the chain’s deals more seamless. However, Defilama’s data shows that ZKSYNC’s TVL is currently down to $139 million.

IGNITE program initially plan 300 million ZK tokens were allocated over a nine-month period to users who would provide liquidity for key token pairings. The first season is scheduled to be between January 6 and March 31, with $100 million worth of approximately $21 million allocated during the release process. At the current price of ZK, 100 million tokens are worth only $6.8 million.

In addition to ZKSYNC, the wider crypto market is also experiencing a downturn across the industry, with top crypto assets like Bitcoin (BTC) and ether (ethereth) Work hard to maintain prices.