StarkWare Changes STRK Token Unlock Schedule After Community Backlash

StarkWare, the developer of Starknet, a decentralized network for scalable and secure computation, has announced a change in its token unlock schedule for its early contributors and investors. The move comes after the community expressed concerns that the original plan would allow the network’s investors to dump on retail Starknet users.

What is Starknet and STRK?

Starknet is a network of nodes that run zk-STARK proofs, a form of zero-knowledge proofs that enable verifiable computation without revealing any private information. zk-STARK proofs are faster, cheaper, and more secure than other types of zero-knowledge proofs, such as zk-SNARKs.

STRK is the native token of Starknet, which is used for paying fees, staking, governance, and incentivizing node operators. STRK was launched on Feb. 20, 2024, on Ethereum and other platforms, with an initial supply of 10 billion tokens.

What was the original token unlock schedule?

According to the original token unlock schedule, 13.4% of the total supply (1.34 billion tokens) held by StarkWare’s early contributors and investors were due to unlock on April 15, 2024. These parties supported StarkWare’s efforts when the company was researching and performing the initial development of Starknet.

The rest of the tokens held by these parties were subject to a four-year linear vesting schedule, starting from April 15, 2024.

Why did the community react negatively?

The community reacted negatively to the original token unlock schedule, as they feared that the early contributors and investors would sell their tokens on the market, causing a price crash and hurting the retail Starknet users.

Some users also accused StarkWare of being unfair and greedy, as they claimed that the company did not disclose the token unlock schedule before the token launch, and that the company had already raised enough funds from its previous rounds of financing.

How did StarkWare respond?

StarkWare responded to the community feedback by announcing a change in the token unlock schedule on Feb. 22, 2024. The company said that it valued the community and wanted to earn its trust by building great tech that embodies blockchain values and stands the test of time.

The revised token unlock schedule is as follows:

  • 0.64% of the total supply (64 million tokens) will unlock on April 15, 2024, as opposed to the planned 13.4% (1.34 billion tokens).
  • 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.
  • 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.
  • 1.4 billion additional tokens will be gradually unlocked by the end of 2025, another 1.5 billion will be unlocked by the end of 2026, and 380 million will be unlocked by March 15, 2027.

How did the market react?

The market reacted positively to the revised token unlock schedule, as it showed that StarkWare was listening to the community and willing to make changes to align with their interests.

In the two days after the token launch, STRK dropped nearly 60% from its Feb. 20 top of $4.41 to trade under $1.90. STRK briefly spiked to over $2 shortly after StarkWare’s latest announcement and is up nearly 5% in the last day, per CoinGecko.

StarkWare hopes that the new token unlock schedule will foster a healthy and long-term growth of the Starknet ecosystem, and that the early contributors and investors will support the network’s vision and mission.

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