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STRK Token's Rocky Road: Starknet's Currency Plummets Post-Airdrop

STRK Token's Rocky Road: Starknet's Currency Plummets Post-Airdrop

Key Takeaways

  • Starknet's STRK token experienced a significant price drop from an initial high of $7.41 to $1.87 following its launch, primarily due to sell-offs by airdrop hunters and Nethermind, despite an initial surge in interest.
  • Concerns were raised about the airdrop's eligibility criteria before its launch, with Yearn Finance's Banteg indicating that many eligible wallets might be linked to exploitative activities.
  • Despite the controversies and the price decline, Starknet's protocol has maintained a firm valuation, with its total value locked reaching $76.95 million and its fully diluted market cap surpassing $20 billion.

The recent launch of Starknet's STRK token within the Ethereum Layer-2 ecosystem experienced a significant decline in value shortly after its introduction.

Despite the initial surge in interest and a high opening price of $7.41 per STRK token on Binance, the price fell to $1.87 at the time of writing due to airdrop farmers and Nethermind selling millions of dollars worth of the token.

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These tokens were designated for various stakeholders within the ecosystem, ranging from Starknet users and developers to Ethereum enthusiasts and even non-Web3 open-source contributors.

Launched on February 20, the airdrop involved the distribution of 728 million STRK tokens from a total pool of 10 billion. Remarkably, 45 million STRK tokens were claimed within the first hour and a half, with claims eventually surpassing 220 million tokens.

Before the airdrop, Yearn Finance anonymous lead developer Banteg warned that 1,854 users seemingly renamed or deleted their profiles after capturing their GitHub snapshots to achieve eligibility for the forthcoming Starknet airdrop.

According to Bantega closer look revealed that 1,175 of these altered accounts are linked by identical GitHub IDs, meaning that over 700,000 wallets eligible for the airdrop are potentially linked to exploitative activities by airdrop hunters.

After the airdrop had launched, Lookonchain reported instances of airdrop hunters consolidating significant amounts of STRK tokens into single addresses, indicating a strategic approach to selling off airdropped tokens for profit.

Lookonchain also noted that Nethermind offloaded 3.41 million STRK tokens, totaling over $6.7 million in value. This move, coupled with the potential for continued sales given Nethermind's remaining holdings, has raised concerns about ongoing price pressure.

Nonetheless, the Starknet protocol maintains a substantial valuation, with its total value locked (TVL) rising to $76.95 million. In addition, its fully diluted market cap soared beyond the $20 billion mark.

Participants still have until June 20, 2024 to claim the tokens.

This was not the only point of discussion surrounding the airdrop. Starknet users were also disappointed that those holding less than 0.005 Ether in their accounts as of November 15, 2023, were to be disqualified.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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