ZKsync Halts Ignite DeFi Incentive Program Amid Market Caution

ZKsync, a prominent player in the decentralized finance (DeFi) sector, has announced that it will not proceed with Season 2 of its DeFi incentive program, 'Ignite.' The decision comes as the company adopts a more conservative spending strategy in response to recent market conditions.

In a recent announcement, ZKsync stated that the remaining rewards under the existing program will be distributed by March 17, 2025, with no additional incentives or rewards planned thereafter.

Strategic Shift in Focus

The DeFi Steering Committee (DSC) of ZKsync explained that while the Ignite program significantly contributed to ZKsync Era’s DeFi liquidity, the continued focus on a single-chain program does not align with the company’s long-term goals. The committee added that implementation of native interoperability technology is taking longer than anticipated, limiting the immediate effectiveness of securing additional Total Value Locked (TVL).

Prudent Budget Management During Market Downturn

The DSC emphasized the necessity of cautious budget management amid the ongoing market downturn. "ZKsync has decided to adopt a conservative spending strategy in the short and medium term," the committee stated. "In an uncertain market, it is crucial to focus and prioritize for sustainable operation."

Season 1 of Ignite saw significant achievements, with ZKsync Era’s DeFi TVL rising from approximately $100 million on January 1 to $270 million, and stablecoin swap slippage improving to 1 basis point.

Acknowledgement of Community Support

The DSC acknowledged that the careful structuring of incentives in Season 1 translated into tangible outcomes, expressing gratitude to the community for their contributions.