Eli Ben-Sasson, Co-founder and President of Starkware (Starkware)
Starknet’s STRK token jumped as much as 10% Thursday after developer firm StarkWare agreed to drastically reduce the number of tokens allocated to the team that are scheduled to unlock in April, following heavy criticism from the community.
The statement came after the Ethereum layer-2 project this week airdropped more than 700 million tokens to early users, contributors and other targeted groups, with the additional disclosures that developers and investors might be able to start sell much of their own allocations as early as next month. The market capitalization of the tokens, based on the circulating supply, currently stands around $1.44 billion.
“After listening to feedback from ecosystem friends and collaborators, we are changing the lockup schedule for StarkWare’s early contributors and investors to make it more gradual,” according to an emailed statement. StarkWare is the primary developer behind Starknet, a layer-2 blockchain atop Ethereum.
Under the new schedule, 0.64% of the 10 billion tokens initially minted will unlock on April 15, instead of the planned 13.4% (1.34 billion tokens), according to the statement.
“The gradual unlock will continue at a pace of 0.64% (64 million tokens) monthly until March 15, 2025, after which it will change to 1.27% (127 million tokens) monthly for the next 24 months until March 15, 2027,” StarkWare mentioned.
“Under the new unlock plan, 580 million tokens held by early contributors and investors will be unlocked by the end of 2024, as opposed to 2 billion of those tokens under the previous schedule,” StarkWare stated. Approximately 1.4 billion additional tokens are supposed to be gradually released by the end of 2025, another 1.5 billion should be unlocked by the end of 2026 and 380 million are expected to be unlocked by March 15, 2027.”
Developed by StarkWare, Starknet is a layer-2 network that utilizes zero-knowledge cryptography, which enables decentralized applications operating over it to scale the Ethereum blockchain. This is accomplished by bundling transactions off-chain into a proof that is then submitted to Ethereum, which is supposed to process the transaction quicker and reduce fees for computation.
Starknet’s token unlocking schedule for the development team and early investors came under criticism from market observers. STRK started trading at $5 earlier this week, then quickly fell. At press time, the token was changing hands at $2.
Edited by Bradley Keoun.
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Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.
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