StarkWare, an Ethereum second-layer scalability company confirmed rumors regarding the StarkNet token’s upcoming launch. The asset is aimed at enabling the project to operate a decentralized ecosystem and to create an effective mechanism to “direct its evolution”.
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StarkNet is an Ethereum solution for second-layer scalability that uses Zero Knowledge Rollup technology. This provides decentralized applications (dApps) with “unlimited” scalability without compromising security, decentralization, and composability.
StarkNet Token was created to empower and encourage key elements of the network. The announcement claims these are StarkNet’s users, operators, and developers.
In that sense, the company has implemented a fee structure and token minting mechanism to prevent “speculative manipulation”, with “largely automated” processes, and a track record of efficient functionality across other blockchains.
This announcement makes it clear about the crucial roles played by Developers and Operators. These components will be eligible for a part of StarkNet tokens.
Developers of smart contracts will get a share of user fees for using L1 and L2 smart agreements. According to the above design, this process will be automatized.
The more a project or smart contract provides value to the StarkWare and the StarkNet ecosystem, the more developers will be rewarded with a “larger portion of tokens allocated for this purpose”. The company clarified that the token allocation mechanism is “yet to be determined”, but they will make a big emphasis on preventing “gamification” and be transparent about this process.
Furthermore, the company said that the StarkNet token won’t have a fixed supply. On the contrary, the supply “will increase over time”. StarkNet will also determine the minting schedule.
#StarkNetAlpha was launched by Ethereum Mainnet in November 2021.
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Now it’s time to advance its decentralization as demanded of an L2 on Ethereum.
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Here’s our decentralization proposal, introducing the StarkNet Token, and the StarkNet Foundationhttps://t.co/zk33gANsin pic.twitter.com/YTd0Uj5NbW— StarkWare (@StarkWareLtd) July 13, 2022
StarkWare Token Allocation Disincentives “Speculation”?
According to the company, it claims that 10 billion StarkNet tokens have been produced. As seen below, these tokens will have the following allocation: 32.9% for “Core Contributors”, 50.1% to be granted by StarkWare to the recently created StarkNet Foundation, and a 17% for StarkWare investors.
StarkNet Foundation’s token allocation will be divided with 18% being destined to Community Provisions and community rebates. These tokens will reward key community members and users “who performed work for StarNet”.
The latter is key in the entire allocation for the StarkNet tokens, the project is set at rewarding work and preventing people from speculating and “gamifing” the mechanism. As the announcement said there will be “no shortcuts to receiving tokens”. StarkWare stated the following regarding its vesting and lockup periods:
All tokens given to Core Contributors and Investors are subject to a 4 year lock-up, which includes linear release and a one year cliff. This is to ensure that long-term incentives align with StarkNet’s community.
Some crypto enthusiasts disagree with the allocation of tokens. They claim that operators and users, who are supposedly two of the most important components of the ecosystem will not be compensated properly. StarkNet users are advised to follow the below recommendations, in view of the launch of the token.
If you are an end user, use StarkNet — but only as it serves your needs today. It should be used for transactions or applications you are passionate about, and not to earn StarkNet Tokens in the future.
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