ZKsync halts Ignite program rewards as token falls 68%
ZKsynk managed to distribute less than 100M tokens
ZKsync has prematurely ended its liquidity rewards program, Ignite, citing bearish market conditions and its transition toward an interconnected zero-knowledge ecosystem.
The ZKsync DeFi Steering Committee (DSC) announced that it will not extend the ZKsync Ignite rewards program, stating that it has achieved its initial objectives and that the project is now shifting its 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 means that the rewards distribution for the final sixth period of Season 1 will be canceled.
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Bearish market conditions hindered rewards distribution
Launched in January 2025, Ignite was originally 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 from $22 million to just $7 million.
ZK price dynamics for six months. Source: CoinMarketCap
ZKsync acknowledged that current market conditions influenced the decision to shut down Ignite.
"To remain resilient, we are focusing and spending smarter rather than struggling against challenges," the team stated.
Instead of continuing Ignite, ZKsync will reallocate resources to Elastic Network architecture, which aims to transform the platform into an ecosystem of interconnected zero-knowledge (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.
