Starknet, an Ethereum layer-2 rollup network utilizing zero-knowledge proofs for scaling, recently conducted the largest token airdrop of 2024 so far. Over 728 million STRK tokens were distributed to around 1.3 million addresses in the Starknet Provisions airdrop program.

The STRK price shot up to $5 on Kucoin exchange within minutes of the airdrop launch but soon corrected lower to around $3.50 amid high volatility. The price has since plunged further to current levels of $2.12 as excitement around the airdrop fizzles out.

With a maximum supply of 10 billion tokens, the fully diluted valuation of Starknet stands at a lofty $35 billion. However, the actual market capitalization based on circulating supply is much lower at $1.5 billion.

Source: CoinStats – Start using it today

Most of the total supply has been allocated to the Starknet Foundation for community initiatives. The rest has been assigned to early contributors, investors, employees and partners.

The airdropped tokens will be subject to a 31-month vesting schedule starting April. This controlled release of new tokens could put downward pressure on STRK price over the long term.

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In the short term, Starknet’s daily active users have already fallen from 220,500 last week during airdrop hype to around 20,000 as users express dissatisfaction regarding airdrop allocation. Lower user engagement could negatively impact Starknet’s growth.

In summary, while the Starknet airdrop generated initial excitement, controlled vesting schedules and declining users could limit significant STRK price appreciation over the next couple of years. The blockchain’s adoption trajectory remains uncertain.

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The post Starknet Drops the Largest Airdrop This Year, But Here’s The Catch for STRK Price appeared first on CaptainAltcoin.