Starknet’s zkLend L2 Protocol Abruptly Shuts Down – What Went Wrong?
Another crypto project bites the dust. Starknet-based zkLend—a Layer 2 lending protocol that promised to revolutionize DeFi—has suddenly shut its doors.
Was it poor adoption, faulty tech, or just another case of 'build now, figure out economics later'? The silence from the team speaks volumes.
Here's the kicker: this was supposed to be the 'scalable future' of decentralized finance. Instead, it joins the graveyard of overhyped L2 solutions that couldn't escape the gravity of reality.
Pro tip for founders: maybe solve one problem before promising to rebuild the entire financial system. Just a thought.
What happened?
zkLend lost over $9.5 million in the exploit that occurred on February 12, 2025. Per the latest update, the protocol has seemingly failed to recover from that attack, with the situation worsened by the delisting of ZEND.
According to the announcement the Starknet-based L2 shared on X, these two factors are central to the decision to cease operations.
“This decision was not made lightly,” zkLend posted. “Over recent months, the exploit we suffered has deeply eroded user confidence, and furthermore, the recent removal of ZEND from major exchanges such as Bybit and KuCoin has further constrained token liquidity and accessibility.”
In light of these challenges, zkLend found it difficult to “effectively allocate toward any new initiatives.”
As a result, the protocol is now shifting focus to user restitution. The $200,000 still held in treasury will be directed toward recovery efforts for users impacted by the hack. zkLend is keeping its DeFi Spring, recovery, and kSTRK portals open for unstaking or claims.
Crypto hacks
zkLend’s exploit is one of many crypto hacks to hit the industry in recent months, with security experts noting a significant increase in crypto thefts amid major breaches such as the $1.4 billion Bybit hack. In 2024, more than 160 incidents saw attackers steal over $2.3 billion, 40% more than the $1.69 billion lost to various attacks the previous year.
Exploits have often debilitated smaller projects, with native tokens plummeting to NEAR zero amid market reaction. Recently, the Sui (SUI) token slumped amid a more than $220 million hack of the decentralized exchange protocol Cetus.
zkLend’s security breach also saw Starknet’s native token come under downside pressure. STRK currently trades around $0.11, down more than 28% in the past month and 84% over the past year.
