If you're familiar with cryptocurrencies and not living under a rock, you probably know about Starknet. It's one of the most hyped crypto projects of all time. However, the ambitious project didn't take off as expected. Now trading under $0.40, we are breaking down the whole situation.
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The Hypeย
Starknet, powered by StarkWare, generated a lot of interest because of its technological innovations. Zero-Knowledge Rollups are seen as a solution to Ethereum's scalability issues, which are a major drawback for mass adoption. Starknetโs approach was to use ZK-Rollups to batch transactions off-chain and only post proofs to Ethereumโs base layer, providing both speed and security.
It ignites the hype. Starknet introduced Cairo, a new programming language for developers to build smart contracts tailored for its unique architecture. This attracted a lot of early interest from developers excited to build on the platform.
Next hype was For Funding, Funding Rounds:
Series A ($30M) led by Paradigm. Other new investors include Intel Capital, Sequoia, Atomico, DCVC, Wing, Consensys, CB Ventures, Multicoin Capital, Collaborative Fund, Scalar Capital and Semantic Ventures. Existing investors Pantera, Floodgate, and Naval Ravikant also participated in the round.
Series B ($75M) led by Paradigm. Other investors: Three Arrows, AlamedaResearch, Pantera Capital, Sequoia Capital, Founders Fund, DCVC, Wing VC.
Series C ($50M) led by Sequoia Capital, with participation from existing investors, including Paradigm, Three Arrows Capital, Alameda Research, and Founders Fund.
Series D ($100M) led by Greenoaks Capital and Coatue.
Next the hype was for incentives and Airdrop.
People literally filled social media platforms with different tutorial and actionables for Starknet Airdrop. People were bridging depositing to the protocol Dex, Name services, Swapping trying weird projects associated with Starknet. Even if a project liked a post of Starknet people would've try the project out. That's how the craze was.ย
The Fall
ย After the tokenmics hit public 50.1% of STRKโs supply has been allocated to the Starknet Foundation for community airdrops, grants and donations. 24.68% of STRKโs total supply will be distributed to early contributors and investors, while 32% has been assigned to StarkWare employees, consultants and developer partners.
FDV Dilema :
The token launched it exceeds the FDV of existing big projects like Matic, Arbitrum & Optimism. Few days after listing the FDV hit $50B. On some exchanges the pico top price was $5+ and than the expected thing happens.ย
Unfairly Distributed Airdrop :
One of the primary criticisms is that the airdrop disproportionately favored early adopters of Starknet. Those who had been using the network for a longer period received significantly larger amounts of STARK compared to newer users. This has led to accusations of centralization and inequality.
Many community members have expressed frustration over the lack of transparency regarding the airdrop criteria. The exact factors that determined the amount of STARK received were not clearly communicated, leaving many feeling uncertain and excluded.
Some have argued that the airdrop reinforces the centralized nature of Starknet. The fact that a significant portion of the token supply was allocated to a small group of early adopters and entities raises concerns about the long-term decentralization of the network.
The biggest concern was many people leftout even after spending 5-6 ETH on Transaction Volume and thousands of Dollars in Transaction Fees. Many users showcase they got a complete zero From the Airdrop.ย
E-Beggor Saga :
One of the shocking moment came out when one of the core team members of Starknet called Airdrop Farmers E-Beggor. The member criticised the Farmer mentality of using the project in farming period then leave it. It sparked huge controversy and a movement started against Starknet.ย
Early Token unlocks :
ย Though the sentiments were bad but team was not holding back even though the token dumping continuosly they announced unlock almost 13% of the total supply for VC&Team after 2 month of Token launch.ย
That counts roughly 1.3 Billion $STRK Tokens. That was enough for the people to leave the space. The price never looked green again after that.ย
The Reality
Starknet is technically a solid project and Truly a ZK Wearhouse. But its true potential to be discovered by time. Team trying their best to bring new technology in blockchain space but once people's sentiments got hurt there's less chance of comeback. Let's see On-Chain key metrics
You can clearly see apart from transactions cost Starknet literally fallen in every single aspect. The transaction fee slshed because of Proto Dank Sharding. Read here About Protodank Sharding
The latest price action also demotivating for any investors/traders to put up some cash into it. The token price is -90% and it's not even completed a whole year. The price might Bouncebit back as we can see some possible positive sentiments.ย
The biggest positive for any trader will be they having the opportunity to buy the coins as VC price. The Valuation stands at $750 Million and way below some VC Purchasing.ย
๐ผ Data Credit -ย
> L2beatย
> Unchained Cryptoย
> Blockworksย
> Starkscanย
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Starknet is a Zk-powerhouse but the technical pros can't move the price action due to people's sentiments. But its always great to see new technology in this space. But teams mismanagement and some critical yet controversial decision let this happen.ย
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