Starknet Token (STRK) is an L2 network developed to enhance Ethereum's scalability and provide unlimited computational power for dApps. Operating with a solution called ZK-Rollup, it enables any dApp to scale for computation limitlessly. The STRK token serves as a mechanism for paying fees, staking for consensus, and voting on governance proposals to operate, secure, and manage the network.
Listed on the Binance exchange in early 2024, STRK token initially traded around $7. However, it quickly dropped to $2 shortly after. Several reasons contributed to this decline.
Firstly, the supply and demand dynamics of STRK token were still unclear. The total and circulating supply of the token were undefined, making it challenging to determine its value. Secondly, the use cases and advantages of STRK token were not adequately promoted. More information about Starknet's technology and vision needed to be shared. Lastly, while competing with other Ethereum L2 networks, STRK token had a lower competitive edge. Several alternative projects had entered the market earlier and gained more users and dApps.
However, the future of STRK token could still be bright. Starknet has the potential to offer a scalable network without compromising Ethereum's security and decentralization. This indicates that the value of STRK token could increase in the future. Nevertheless, predicting future price movements is difficult, and investors should conduct their research and consider the risks.
