Airdrops are becoming increasingly popular among cryptocurrency enthusiasts as a way to earn large amounts of money with minimal effort. Some notable examples of successful airdrops include Optimism and Arbitrum, while already launched airdrops like StarkNet (STRK) have generated excitement. In this article, we will introduce in detail what StarkNet is, the STRK coin, and its token economics.
Introducing StarkNet (STRK): Exploring an Emerging Power
StarkNet is a Validity Rollup Layer 2 solution designed to provide Ethereum with high throughput, low gas cost, and the same level of security as Layer 1. StarkNet plays a key role in expanding the capabilities of Ethereum by employing STARK-proof off-chain computation. This approach is similar to solving a Sudoku puzzle in that verifying the solution replaces the heavy L1 computation, making the processing lighter, faster, and more economical.
As a permissionless layer 2 network on Ethereum, StarkNet leverages STARK, a highly scalable and secure cryptographic proof system. It uses the Cairo language to write contracts, a Turing-complete programming language designed specifically for STARK proofs. The emergence of StarkNet represents a big step forward for the crypto world, bringing more possibilities for innovation and development to the blockchain ecosystem.
StarkNet: Revolutionary Ethereum Scaling Solution
StarkNet was developed by Israeli blockchain company StarkWare Industries to expand Ethereum’s solutions. Officially launched in February 2022, StarkNet provides a platform for anyone to build decentralized applications (DApps) as a permissionless second-layer network. In addition, StarkWare has launched another platform called StarkEx, which has been in use since June 2020. However, unlike StarkNet, StarkEx is a permissioned network designed for the specific requirements of DApps.
StarkWare was founded in 2018 and is backed by high-profile investors including Sequoia Capital, Paradigm and Coatue. In May 2022, StarkWare raised US$100 million in Series D financing, valuing it at US$8 billion at the time. To date, StarkWare has raised a total of $261 million in funding. The launch of StarkNet marks an important development for the Ethereum ecosystem, paving the way for broader DApp innovation.
StarkNet: Layer 2 solution for efficient operations
StarkNet serves as a second layer solution, processing transactions on its network and settling them on Ethereum for increased scalability. It does this by compressing thousands of transactions into data structures called “proofs,” which are then submitted to Ethereum as transactions. This greatly increases throughput, i.e. the number of transactions processed per second, and significantly reduces the cost of each transaction.
StarkNet utilizes a proprietary proof system called zk-STARK, or zero-knowledge scalable transparent knowledge proof. The system improves privacy and security by verifying the correctness of transactions without revealing confidential information. StarkNet has two core components: the sequencer and the prover. The sequencer is responsible for executing transactions and proposing blocks, and can handle far more transactions per second than an Ethereum node. Provers, on the other hand, provide mathematical guarantees for the validity of block transactions, which are then ultimately settled on Ethereum.
Although STARK technology is widely recognized as secure and mature, StarkNet is still working hard to become a public resource like Ethereum or other networks. This requires continued decentralization of its governance, operations, and development, a process that will be facilitated through the participation of the StarkNet Foundation and the StarkNet token. The StarkNet Foundation is an independent entity established to advance the development of StarkNet technology. As a non-profit entity, the Foundation is dedicated to advancing and maintaining StarkNet as a public resource. The foundation will launch with 50.1% of the initial token supply to ensure efficient deployment of network resources to maintain, develop and expand StarkNet.
STRK Coin: The Power Source of the StarkNet Ecosystem
The STRK token, also known as StarkNet’s native cryptocurrency, is a key component of the StarkNet Layer 2 network. STRK tokens have multiple uses:
Governance: The STRK token is designed to function as a governance token. STRK holders have the right to directly participate in voting and delegation on improvement proposals and changes to the StarkNet protocol.
Staking: Key protocol services, such as ordering and data availability configuration, may require STRK tokens to be staked to ensure the security and stability of the network.
Transaction Fees: Currently, Gas fees on StarkNet are paid in ETH. In the future, the developers plan to introduce the ability to use STRK tokens to pay for gas fees.
STRK Token Economics: Exploring StarkNet’s Monetary System
The initial supply of STRK tokens is 10 billion tokens, and this cryptocurrency does not have a hard supply cap (fixed supply). As of November 2023, the minting rate of STRK tokens has not yet been determined. Of the initial 10 billion STRK tokens, they will be distributed as follows:
17% is allocated to StarkWare’s investors, the core developers of StarkNet.
32.9% is allocated to core contributors, which includes StarkWare, its employees, consultants, and development partners.
50.1% is allocated to the StarkNet Foundation for research grants, donations, provisions, rebates, and strategic reserves.
This distribution model is designed to ensure the sustainable development of StarkNet and the healthy operation of the ecosystem. By allocating STRK tokens to different parties, StarkNet is committed to incentivizing developers, investors and community members to participate in and promote the development and growth of the network.
What’s ahead for StarkNet (STRK)
The StarkNet encryption project is always actively seeking new partners. Among them, Chainlink is one of their important partners. In February 2023, Chainlink Price Feeds will be officially available on the StarkNet testnet, marking an important milestone in providing industry-standard reliable oracle services to StarkNet developers. The collaboration comes with the technical support and expertise of SpaceShard and is part of the Chainlink SCALE program.
StarkNet tokens will cover part of the operating costs of Chainlink oracle nodes, which provide various data sources and other oracle services to StarkNet, aiming to accelerate the adoption and development of StarkNet by developers and users. StarkNet's development team continues to update and improve StarkNet and launch new features in line with the roadmap, demonstrating the promising future of this innovative platform. With continued development and cooperation, StarkNet is expected to become an important part of the blockchain ecosystem and promote the development and innovation of the cryptocurrency industry.