STRK: 1.3M wallets, 1.3B tokens, $2.15B value
Starknet is a layer 2 scaling solution for Ethereum, and the software firm Starkware is facing criticism over 1.3 billion STRK tokens unlock for transfer and sale just weeks after the token's launch.
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Starknet is a permissionless decentralised validity-rollup (zero-knowledge proofs - ZK-Rollup) that operates as an L2 network over Ethereum.
It's a layer 2 scalability solution for Ethereum to enable faster and cheaper transactions while maintaining the security guarantees of the underlying blockchain.
Starknet tokens (STRK) are the native cryptocurrency of the Starknet network. It serves as the primary unit of account on the network.
STRK tokens are used to pay for transaction fees and gas costs associated with deploying and interacting with smart contracts on StarkNet.
They also serve as collateral for validators who secure the network through staking.
What are Starknet tokens?
Utility token: Primarily used for three main purposes
Transaction fees: Can be used to pay for transactions on the Starknet network, alongside ETH.
Staking: Can be staked to participate in the network's consensus mechanism and secure it.
Governance: Holders can vote on governance proposals to influence the future development of the network.
Not an investment: Important to note that STRK tokens are not intended as investments and do not represent equity in StarkWare or the Starknet Foundation.
Key features of STRK
Unlimited scale: Starknet uses the power of STARK technology to achieve significantly faster and cheaper transactions compared to Ethereum's mainnet.
Ethereum security: Transactions are ultimately settled on the Ethereum blockchain, inheriting its security and decentralisation.
General-purpose: Developers can deploy any type of application on Starknet, enabling a wide range of use cases.
Composability: Applications built on Starknet can easily interact with each other, similar to applications on Ethereum's mainnet.
Total supply: 1 billion tokens, with a distribution plan outlined in the official documentation.
Distribution Plan: Millions of Users Eligible
Nearly 1.3 million wallets to receive STRK tokens
Early users of ecosystem dApps
Network contributors
Ethereum builders
Open-source developers
Token aims to decentralise and govern the network
7% of total supply (700 million tokens) distributed
Claim period begins February 20th, lasts until June 20th
Who is eligible?
Over 500,000 Starknet wallets and 600,000 StarkEx wallets
Ethereum contributors (Protocol Guild members, EIP authors, solo stakers)
137,000 open-source developers
19,000 ETH stakers
Eligibility criteria
Based on November snapshot: transaction amount and frequency
$100 cumulative value transacted (minimum)
Over 5 transactions
Activity in separate time intervals
Starkware Defends Atypical Token Unlock Structure
On April 15, less than two months after STRK’s upcoming launch on February 20, over 1.3 billion STRK tokens allocated to investors and early Starknet contributors
Ethereum software firm Starkware faced criticism after revealing that over 1.3 billion STRK tokens allocated to investors and early contributors will unlock for transfer and sale just weeks after the token's launch.
That's 13.1% of the total STRK token supply—will unlock for transfer and sale. That sum is already estimated to be worth over $2.15 billion, judging by pre-market trading prices.
Some users called the move "predatory" and "borderline criminal."
Eli Ben-Sasson, Starkware’s co-founder and CEO, argued that the decision showcases the company's unique approach rather than reflecting any shortcomings. In an interview to Decrypt, he explained his case.
“The unlocking for the team and early investors… is one aspect in which we may be non-standard … but we build different and we view things a little bit differently.”
Commitment to Starknet
Ben-Sasson acknowledged the unusual nature of the swift token unlock but maintained that Starkware's dedication to the project sets it apart. He pointed out that all 150 current employees remain fully committed to advancing Starknet. Also his own career shift: leaving a tenured professorship at the Israel Institute of Technology to join Starkware.
“Let's address the elephant in the room … What people are really concerned about is whether anyone at Starkware, or in the Starknet ecosystem, will still be working on Starknet and advancing it passionately three months out, or one year out.”
“Let me make this very public announcement … As far as the eye can see, the only thing on the radar of Starkware’s 150 employees—and its expanding team—will be advancing Starknet. I left a very lucrative position as a professor in academia to do this, and I’m not going back.”
Addressing Price Concerns
Regarding potential market manipulation or negative impacts on STRK's price once the tokens become available in April, Ben-Sasson noted that extending the token lock period would not necessarily prevent these issues. Instead, he asserted that earlier access to tokens rewards early supporters who made significant contributions to the project.
“This concern could also happen one year out … It really wouldn’t be the right thing to unnecessarily delay them … when we have full conviction in our long-term commitment to advancing Starknet.”
Maintaining Trust
Despite the quicker token release schedule, Ben-Sasson insisted that Starkware remains steadfast in its commitment to building and improving Starknet. By focusing on transparency and delivering results, he expressed optimism that the community would recognise the company's intentions and continue supporting Starknet's growth.
TTD Week That Was 📆
Saturday: $1.6B sell-off and $2B distributed🤞
Friday: Coinbase Rides the Wave Up ⬆️
Thursday: ETFs - Gold v Bitcoin ⚔️
Wednesday: $2T Market Cap 👀
Tuesday: Bitcoin vs Everyone 🌍
Monday: Bitcoin Bulls On The Move? ⬆️
TTD Week in Funding 💰
Ethena Labs. $14 million. Developer of the Ethereum-based yield bearing stablecoin: USDe.
Witness. $3.5 million. Verification protocol to issue digital ownership using existing blockchain technology.
Helika. $8 million. Real-time analytics and onboarding of new users to gaming studios and popular NFT collections.
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