The DAO behind ZKsync has prematurely ended the Ignite rewards program as of March 17, citing bearish market conditions.
ZKsync Ignite Program Update ?
After careful consideration, the DeFi Steering Committee (DSC) has decided to not renew Ignite for Season 2 and will be sunsetting the program starting March 17th, 2025 by turning off rewards for period 6
Here’s why:
— ZKsync Ignite (@ZKsyncIgnite) March 13, 2025
Following this, no new incentives will be distributed. Settlements for all service provider contracts will be completed by March 30.
The Ignite program aimed to distribute 300 million ZK to stimulate liquidity. Of the nine-month program, which began in January, two months have passed.
The DeFi project’s steering committee cited three reasons for the initiative’s early termination:
- Focus on Elastic Chain. The team intends to concentrate resources on implementing the protocol. Ignite provided Era with liquidity to function as its DeFi hub following the launch of the interoperability mechanism. Allocating additional funds to a program focused on a single network “no longer aligns with this broader goal.”
- Own interaction time. Seamless internal compatibility within the Elastic Chain is a priority, but the technology required for its implementation demands more time than expected. Adding more TVL now would lead to diminishing returns.
- Market realities. The team acknowledged the onset of a bear market. Developers have opted for a more conservative approach regarding expenditures in the short and medium term.
In 2021 and 2022, ZKsync raised $450 million in investments.
In September 2024, the CEO of the company behind the protocol, Matter Labs, Alex Gluchowski announced a 16% reduction in staff.
In June, the project conducted an airdrop of 3.6 million ZK tokens. Following the large-scale distribution, key metrics significantly declined.
Back in December, it was revealed that Deutsche Bank plans to launch an L2 for Ethereum using the ZKsync stack.