ZKsync has confirmed on ZKsync Ignite’ X account of pausing this program, which made a pump for this ecosystem at the beginning of 2025. This move has raised several questions from the community about the ecosystem’s activities and effectiveness.
ZKsync Ignite Program Newest Update
Yesterday, March 13, after many rumors, The Layer 2 protocol Ignite announced the newest updates about the pause of ZKsync Ignite program on its X account.
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
After thorough consideration from the DeFi Steering Committee, ZKsync Ignite decided not to renew Ignite for Season 2. To be more detailed, they will sunset the program starting March 17, 2025, by discontinuing rewards for Period 6. This move aligns with a strategic shift toward the Elastic Network, aiming to enhance long-term interoperability and scalability across ZK Chains. Also, due to the delay in technology preparation for native interop, they need to distribute TVL more effectively.
Additionally, the change comes amid a bearish cryptocurrency market. During this condition, ZKsync can adopt a more conservative spending approach, similar to other ecosystems adjusting to current financial conditions.
The ZKsync Ignite Program was a DeFi-focused initiative launched by ZKsync in January 2025. The aim of the program is to transform its Layer 2 scaling solution into a unified liquidity hub for the Elastic Network. Introduced as ZKsync’s first Token Program Proposal (TPP), Ignite aimed to enhance liquidity across DeFi Elastic chains, reduce fragmentation, and drive user adoption through reward incentives. Managed by entities like Merkl, OpenBlock Labs, and the DeFi Steering Committee (DSC), the program distributed rewards to boost total value locked (TVL) on ZKsync Era.
Impacts upon Updates
After the news of the sunset of the program, the ecosystem records several responses from the public and the community. As of the time of writing, the Total Value Locked (TVL) of the entire ZKsync Era ecosystem stands at $140 million, down from its peak of $270 million (at the time of the ZKsync Ignite program announcement). Many are concerned that the decline in TVL is a sign of capital outflow from the ecosystem, as shown by most of the projects in the ecosystem.
The excessive focus on Elastic Network could pose significant risks to ZKsync Era upon the launch of its new version, especially given the intense competition from other Layer 2 solutions like Optimism and Arbitrum. While other Layer 2 solutions are making efforts to revitalize their ecosystems with a series of new updates, ZKsync is gradually losing its foothold as projects within its ecosystem seem to be losing momentum.
Initially, the ZKsync Ignite Program served as a key channel to incentivize users and motivate project development. However, losing this incentive has further driven both users and projects away, leading to long-term negative consequences for the ecosystem.
A large number of the chain supporters believe that this is a necessary and essential shift given the current challenging market conditions. Focusing on system development helps strengthen user confidence in an ecosystem with a solid core and real value. Moreover, TVL could fully recover if the development of the Elastic Network proves successful.
About ZKsync Era
ZKsync Era is a Layer 2 scaling solution built on Ethereum, utilizing zero-knowledge (zk) rollup technology to enhance scalability, security, and cost-efficiency. Developed by Matter Labs, it is the first zkEVM (zero-knowledge Ethereum Virtual Machine) on mainnet, offering full EVM compatibility for developers and users. ZKsync Era supports decentralized applications (DApps), particularly in DeFi, and aims to serve as a liquidity hub within the Elastic Network.
With features like on-chain governance and robust security, it positions itself as a key player in Ethereum’s scaling ecosystem, despite challenges like delays in native interoperability across ZK Chains.
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