ZKsync Cancels Its 'Ignite' Liquidity Program Ahead of Bearish Market Conditions

ZKsync announced on Friday that it had cancelled the second season of its liquidity program, Ignite.

Layer 2 protocol ZKsync has cancelled the second season of its liquidity program, Ignite, amid the current bearish market conditions.

The decentralised finance (DeFi) incentive program will halt on March 17, 2025, with the DeFi Steering Committee (DSC) citing multiple reasons for sunsetting Ignite.

The program, which launched in August 2022 to boost liquidity on ZKsync Era and position it as a DeFi hub, has served its purpose but is now deemed less critical given technological and market realities, the team noted.

"After careful consideration, the 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," ZKsync announced via X post on Friday.

"We'll be distributing all remaining rewards by March 17th, 2025 and concluding service provider contracts by March 30th, 2025."

The ZKSync team added that the decision follows a period of deliberation, taking into account the cryptocurrency market's bearish tendencies and the need for sustainable practices in the long term.

"Unfortunately we’re navigating a bearish market right now," ZKSync stated in the update.

"In line with many other ecosystems, ZKsync has decided to be more conservative with spend in the short to medium term in response to these evolving conditions. To stay sustainable, we’re tightening our focus and spending smarter, rather than fighting headwinds."

Focus on Elastic Network

Additionally, ZKsync is redirecting resources toward its long-term vision: the Elastic Network, an expanding verifiable blockchain network powered by zero-knowledge proofs.

The team believes that continuing to invest heavily in the single-chain Ignite program no longer aligns with this goal, especially as native interoperability across the Elastic Network—crucial for seamless cross-chain interactions—faces delays.

"We're pivoting to a more modular and efficient model for sustainable growth. This shift will enable us to integrate new chains like Evmos and introduce advanced use cases like private transactions and programmable matter."

The news saw the ZKSync token trade slightly higher, with ZK hovering near $0.06982 at the time of writing. The altcoin's price was up nearly 5% in 24 hours.

However, after a recent sell-off, it remained 16% down in the past week. Nonetheless, ZK is still up over 1,100% year-to-date.