StarkWare changes STRK token unlocking schedule after community backlash
StarkWare, the developer of the Starknet decentralized network for secure and scalable computing, has announced a change to the token unlocking schedule for early contributors and investors. The move came after the community expressed concerns that the original plan would allow the network's investors to dump retail Starknet users.
What are Starknet and STRK?
Starknet is a network of nodes running zk-STARK proof, a form of zero-knowledge proof (ZK) that allows verifiable computations without revealing any private information. zk-STARK proofs are faster, cheaper, and more secure than other types of ZK proofs, such as zk-SNARKs.
STRK is Starknet's native token, used for fee payments, staking, governance, and incentivizing node operators. STRK was launched on February 20, 2024 on Ethereum and other platforms, with an initial supply of 10 billion tokens.
Initial token unlock schedule
According to the initial token unlock schedule, 13.4% of the total supply (1.34 billion tokens) held by StarkWare contributors and early investors will be unlocked on April 15, 2024. These parties supported StarkWare's efforts when the company was in its early stages of research and development of Starknet.
The remaining tokens held by these parties are subject to a four-year linear *vesting schedule, starting April 15, 2024.
*Vesting: The process of holding, locking and issuing tokens, to create leverage to enter the market.
Why did the community react negatively?
The community reacted negatively to the initial token unlock schedule, as they feared early contributors and investors would sell tokens on the market, causing price drops and harm to retail Starknet users.
Some users also accused StarkWare of being unfair and greedy, as they claimed the company did not disclose the token unlocking schedule before launch and had raised enough capital from previous funding rounds.
How did StarkWare respond?
StarkWare has responded to community feedback by announcing a change to the token unlock schedule on February 22, 2024. The company says it values the community and wants to earn its trust by building great technology that demonstrates blockchain values and stands the test of time.
The revised token unlocking schedule is as follows:
– 0.64% of total supply (64 million tokens) will unlock on April 15, 2024, instead of the planned 13.4% (1.34 billion tokens).
– Tokens will continue to be gradually unlocked at a rate of 0.64% (64 million tokens) monthly until March 15, 2025, after which it will change to 1.27% (127 million tokens) monthly for the next 24 months until March 15, 2027.
– According to the new unlocking plan, 580 million tokens held by contributors and early investors will be unlocked by the end of 2024, instead of 2 billion tokens according to the previous schedule.
– 1.4 billion tokens will be unlocked gradually by the end of 2025, another 1.5 billion tokens will be unlocked by the end of 2026, and 380 million tokens will be unlocked by March 15, 2027.
How did the market react?
The market has reacted positively to the revised token unlock schedule, as it shows that StarkWare is listening to the community and is willing to make changes to suit their interests.
In the two days following the token launch, STRK fell nearly 60% from its February 20 high of $4.41 to trade below $1.90. However, STRK quickly skyrocketed to over $2 immediately after StarkWare's latest announcement and is up 6% in the past day.
Source: Tradingview
StarkWare hopes the new token unlocking schedule will promote the healthy and long-term development of the Starknet ecosystem, and that early contributors and investors will support the network's vision and mission.
