ZKsync is a Layer 2 network that enhances scalability using zk-rollup technology, processing transactions offchain to reduce fees and accelerate transaction speeds.

In January 2025, ZKsync launched ZKsync Ignite — an ambitious incentive program designed to reward DeFi users for providing liquidity, lending, and trading on selected protocols built on ZKsync. The goal? To attract liquidity to the ZKsync Era blockchain.

However, launching a liquidity incentive program from scratch is no easy task. While ZKsync had the ZK tokens to distribute, it lacked the infrastructure to execute a program of this scale.

ZKsync chose Merkl as its primary partner to manage the program end-to-end, relying on its expertise from design to incentive management to deliver a turnkey solution:

White-labeled front-end
Merkl designed, developed, and hosted a white-labeled app. This dedicated ZKsync Ignite app allowed users to explore reward opportunities, supply liquidity via Enso and Kyberswap, bridge assets with Jumper, and seamlessly claim their rewards.

Protocols integration
Merkl enabled the Ignite team to seamlessly onboard 15 participating protocols, including Aave, PancakeSwap, Uniswap, RFX, Holdstation, zkSwap, and more—ensuring they were fully supported by the Merkl engine to efficiently distribute rewards to their users.

Incentive calculation and distribution
Merkl managed the calculation and distribution of ZK token incentives to users engaging with participating DeFi protocols — tracking liquidity positions to ensure accurate rewards.

ZKsync Ignite delivered outstanding results, significantly boosting DeFi activity on the ZKsync Era blockchain.

The program has driven a 158% increase in Total Value Locked (TVL), soaring from $97M to over $250M — far surpassing the initial goal for Season 1 within just one month. This growth was achieved despite challenging market conditions, including a 50%+ drop in the price of ZK token.

The program successfully strengthened DEX and lending markets, improving liquidity and reducing slippage. For example, stablecoin swaps (USDC-USDC.e) saw slippage drop to just ~5.4 basis points, nearing the program’s 5 bps target, while USDC-USDT trades improved to 6.5 bps. Additionally, native USDC liquidity grew 2.5x, creating a more robust onchain trading environment.

On the bridging side, Ignite attracted significant new liquidity to ZKsync Era, with $55M in net inflows in the first week alone. While some outflows occurred at the end of each incentive period, the network retained a net inflow of $22M, reinforcing ZKsync's position as a growing DeFi hub.

Source: OBL Report