- Amber Group actively participated as a market maker, accumulating 3 million ZKX tokens to stabilize liquidity.
- ZKX Protocol ceased operations on July 31, citing unsustainable economic conditions.
- Hashkey Capital and other investors expressed dissatisfaction with ZKX's poor communication and transparency.
The abrupt shutdown of ZKX Protocol on July 31 has sent shockwaves through the cryptocurrency markets, impacting stakeholders including Amber Group, a prominent market maker.
Amber Group revealed, on the X social platform, its direct involvement with ZKX as a market maker, particularly during the token generation event on June 19. They facilitated liquidity provision by acquiring a 2 million ZKX token loan under standard conditions to ensure market stability.
Market Strategies and Challenges
Despite the initial lack of buying interest, Amber Group's strategy aimed to maintain a balanced liquidity pool to support the project's long-term viability. This plan, however, faced hurdles as the ZKX team, on June 24, requested the return of half the loaned tokens—1 million ZKX—to reduce market circulation and instill community confidence.
Consequently, Amber Group adjusted their position, retaining 1 million loaned tokens and purchasing an additional 2 million from the open market, bringing their total holdings to 3 million ZKX tokens.
Investor Discontent and Project Transparency Issues
Investors like Hashkey Capital have voiced their frustrations over the lack of transparency from ZKX's management. Criticizing the protocol for insufficient disclosure regarding financial and operational strategies, they highlighted the eroded trust among investors.
Hashkey pointed out that the uncommunicative nature of ZKX's management, especially the approach taken by founder Eduard Jubany Tur, significantly contributed to the dissatisfaction, culminating in the protocol’s cessation due to untenable economic conditions.
The closure of ZKX Protocol highlights vulnerabilities within the crypto market, emphasizing the importance of clear communication and robust regulatory practices. Moving forward, the community and stakeholders are advocating for stricter governance measures to safeguard against such disruptions, ensuring a more stable and transparent environment for all participants.
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