Key Takeaways

  • StarkNet Token Confirmed Following 3AC Co-Founder’s Tweet
  • Will Be Used For Governance, Transactions, and Consensus
  • Community Airdrops Likely For Contributors, Users

_____________________________________________________________________________________________________

The race to dominate Layer 2s (L2) in the ETH space is not stopping.

StarkWare, the L2 Ethereum scaling solution, has recently announced their upcoming token in a 4-part Medium article series. This comes right after 3AC co-founder Su Zhu’s cryptic tweet following the insolvency of his fund.

Also Read: Su Zhu of Three Arrows Capital Returns to Twitter, Leaves More Questions Than Answers

The token will be used for the following purposes:

  • Governance
  • Transaction Fees on StarkNet
  • Participating in StarkNet’s consensus mechanism

Token distribution and plans

Currently, 10 billion tokens have already been minted. The distribution of the tokens is as shown here.

17% is allocated to early investors, 32.9% to core contributors (including the team). These will be under a four-year vesting and one-year cliff period.

50.1% of the remaining tokens will also be given out to the newly formed StarkWare Foundation, ranging from the following:

  • Grants: For research and future work on StarkNet
  • Donations: To universities and other NGOs
  • Rebates: To cover cost of bridging/onboarding from ETH to StarkNet
  • Provisions: To StarkEx L2 users (dYdX, Immutable X)
  • Strategic Reserve: For funding of ecosystem activities
  • Unallocated (unknown use)

There is also currently no airdrop that is planned for the StarkNet community, at least until next year. StarkWare has said that this will be given to the community based on “verifiable work” and is planning to filter out airdrop farmers with a Snapshot before the announcement.

This Snapshot for provisions was already taken on June 1, 2022, so early users of StarkEx, a permissioned layer powering the DeFi derivatives project dYdX may have something to look forward to before the announcement.

“If you are an end user, use StarkNet — but only as it serves your needs today. Use it for those transactions and applications that you value, not in expectation of any future reward of StarkNet Tokens.”

The token will officially go live in September.

The L2 War Heats Up

The L2 space remains competitive and StarkWare is not the only one that has been making moves.

Just last month, Optimism, an L2 rollup solution also announced an airdrop for their governance token, OP.

Arbitrum, another L2 scaling solution, also announced Arbitrum Odyssey, a 2-month long onboarding process for users to experience various DeFi and other projects in Arbitrum One. In return, users would be rewarded with exclusive NFTs (and a potential airdrop). This has been temporarily paused following a surge in gas prices that surpassed gas on L1.

Odyssey is expected to return once Arbitrum launches its Nitro upgrade.

Also Read: Inflation Rises To 9.1%, Making Sense Of How It Affects The Crypto Market

Inflation Rises To 9.1%, Making Sense Of How It Affects The Crypto Market

[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]

Featured Image Credit: GlobalHappenings