StarkNet’s ZKX Protocol Shocks Major Market Makers With Sudden Quick Shutdown

Key Points:

• The StarkNet’s ZKX Protocol, a decentralized trading platform, abruptly closed without prior notice, shocking investors and market makers.
• Investors, including ArkStream Capital and Amber Group, criticized ZKX for not sharing financial details and future plans.

According to a post by The Block, the sudden shutdown of StarkNet’s ZKX Protocol has shocked investors and market makers. It happened without warning or notice to either investors or market participants, leading to many questions and allegations.

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StarkNet’s ZKX Protocol Shuts Down Abruptly, Leaving Investors Surprised

Ye Su, the founder of ArkStream Capital, took to X and said the investors were caught off guard when it was shut down. “When ZKX shut down, as investors, we got zero heads-up. The team claimed they ran out of money, refused to provide any financial or spending details, and wouldn’t communicate with us,” Su said.

HashKey Capital said ZKX had never disclosed its financial status and plan for the future. Another major investor and market maker, Amber Group, unveiled 3 million ZKX tokens the company holds on X.

According to Amber, despite efforts to maintain liquidity in the market—buying tokens even as prices fell—the lack of organic interest and ongoing financial losses contributed to the project’s downfall. In light of this, the company requested transparency and accountability in such ventures.

Others have gone as far as to say it was similar to a “rug pull,” blockchain analyst ZachXBT noted, citing the token generation event and its immediate loss of value thereafter.

ZKX Founder Defends Closure Decision Amid Allegations of Misconduct

StarkNet’s ZKX protocol, meant to provide a decentralized order book similar to that of dYdX, aimed to give DeFi properties such as trustlessness and independence from third parties.

ZKX founder Eduard Jubany Tur defended this move by stating that the project couldn’t be sustained after the underperformance of the token. He assured that the closure would protect customers until all markets were securely delisted.

Tur further added that announcing it in advance could have put customer funds in danger because potential exploits wouldn’t allow for this kind of warning.