ZkSync (ZK) Faces Sharp Decline in Network Activity, TVL Hits Year-to-Date Lows
The post ZkSync (ZK) Faces Sharp Decline in Network Activity, TVL Hits Year-to-Date Lows appeared on BitcoinEthereumNews.com.
Coinspeaker ZkSync (ZK) Faces Sharp Decline in Network Activity, TVL Hits Year-to-Date Lows ZkSync (ZK), a prominent Layer 2 (L2) solution for Ethereum, is grappling with a significant decline in network activity. According to data from The Block’s dashboard, daily active addresses on the zkSync network have plummeted by 66% since June 23, reaching their lowest level of the year. Concurrently, the number of daily transactions fell to a year-to-date low of 293,000 as of July 23. This drop suggests a marked decrease in user engagement with the platform, impacting its role in decentralized finance (DeFi) and NFT trading. TVL Declines Despite Market Trends The decline in user activity is mirrored by a substantial decrease in the Total Value Locked (TVL) on zkSync. The network’s TVL has contracted to $96 million, its lowest since April 2023, as shown by DefiLlama. This decline contrasts with the broader trend of rising TVL across various DeFi networks, indicating potential challenges in liquidity and user retention for zkSync. The performance of zkSync’s native token, ZK, has also suffered amid these declines. The token recently hit an all-time low of $0.13 on July 5 but has since recovered to $0.15. However, it has fallen nearly 10% over the past week. Technical indicators reflect a bearish outlook, with the Relative Strength Index (RSI) at 42.10 and the Directional Movement Index (DMI) showing a bearish crossover. These metrics suggest ongoing selling pressure and potential further declines in the token’s value. zkSync Post-Airdrop User Decline zkSync’s airdrop distributed 3.67 billion ZK tokens, or 17.5% of its supply, to 695,232 wallets. The airdrop’s immediate token liquidity set it apart from other token distributions, which typically involve lock-up periods. Despite the large airdrop, zkSync saw a large sharp decline in network activity. The anticipated boost in user engagement did not occur,…
Filed under: News - @ July 25, 2024 5:28 pm