Starknet's STRK Experiences Over 50% Plunge Amid Criticism Over Token Issuance and Massive Airdrop

By: Isha Das

Starknet's token STRK saw a significant dive of 53% in its value after it began trading on various notable cryptocurrency exchanges including Binance, Bitfinex, and OKX. This comes after a grand airdrop distribution of a whopping 728 million tokens to over one million addresses. The price plummeted to a current rate of $2.04, a stark contrast to the initial price of around $5 per token.

Despite this, Starknet is still a significant player amongst the top 60 cryptocurrencies with a handsome market capitalization of $1.4 billion. Starknet's innovation is of note here as it acts as a Layer 2 solution, boosting scalability and Ethereum-level security. Developed by blockchain firm StarkWare Industries, Starknet was designed to address the scalability concerns of Ethereum. The protocol was fully deployed in February 2022 as a permissionless network, facilitating developers across the world to incorporate its infrastructure into decentralized apps.

A decentralized finance researcher identified several factors such as Starknet's use of the cryptographic proof system, STARKs, for transaction validation on Ethereum and its resistance to "lazy copy-paste forks" by virtue of the Cairo Development Language, that could propel Starknet's growth. Also, Starknet's STRK token airdrop is expected to have a "wealth effect," drawing capital into the ecosystem, with intentions to use 50 million STRK tokens to boost DeFi protocols.