Exercise took a downturn for StarkNet after its a lot anticipated airdrop didn’t meet the group’s expectations.
Ethereum Layer 2 community StarkNet is struggling to get well from an airdrop that left some customers disgruntled as most exercise metrics plummet.
Based on the StarkNet Basis’s Dune dashboard, distinctive each day lively customers (DAUs) have plummeted 98% to six,100 on Aug. 26 from 298,400 on Feb.20, the day earlier than the airdrop. In distinction, DAUs of competing Layer 2 options like Scroll and Linea elevated by 49% and 173% to 53,000 and 213,000, respectively, in the identical time-frame.
Dune information additional reveals a steep decline in each day transactions on StarkNet. Transactions have plunged 82% to 113,000 on Aug. 26, down from its all-time excessive of 1.2 million on Feb. 20.
StarkNet’s whole worth locked (TVL) has slumped by 65% to $588 million from its all-time excessive of $1.77 billion in March, and is down 51% because the mission’s airdrop, in accordance to L2Beat.
STRK token has plummeted to an all-time low of $0.37, down 86% from its excessive of $2.63 in March, based on CoinGecko. STRK has a market capitalization of $621 million and a totally diluted market cap of $3.83 billion.
Based by Eli Ben-Sasson, Uri Kolodny, Michael Riabzev, and Alessandro Chiesa and launched in 2022, StarkNet is a scaling answer for Ethereum, aiming to reinforce transaction speeds and scale back prices utilizing zero-knowledge (ZK) know-how. ZK know-how permits for the bundling of transactions off-chain whereas making certain their validity by way of cryptographic proofs, thereby sustaining Ethereum’s safety whereas scaling its capability.
StarkWare, the corporate behind Starknet first raised a $6 million seed spherical over 5 years in the past. The latest spherical, a $100 million Collection D at $8 billion valuation, was accomplished in Might 2022.
Controversial Airdrop
The StarkNet airdrop distributed 700 million STRK tokens, representing 7% of the overall 10 billion token provide. Over 1,000,000 customers had been eligible, with 478 million tokens already claimed, in accordance to a Token Circulate dashboard.
Of the distributed tokens, 51% went to StarkNet customers (506,896 recipients). ETH stakers obtained 22%, shared amongst 19,006 people, whereas StarkEx customers acquired 9.62%, reaching 622,996 customers. StarkNet ECMP members obtained 9.05%, allotted to 2,098 recipients. The remaining 9% was shared amongst builders, EIP authors, and Ethereum Protocol Guild members.
StarkNet’s post-airdrop decline exemplifies how even bigger crypto tasks can wrestle to maintain momentum after airdrops. Airdrops in crypto usually result in frustration, as customers carry out duties in anticipation of future rewards, solely to turn out to be disenchanted if they do not obtain tokens.
Customers Felt Deserted
Eli5DeFi, a DeFi analysis agency, stated in an e-mail message to The Defiant that many customers felt deserted after discovering they didn’t qualify for the airdrop, regardless of seemingly assembly the standards based mostly on their on-chain exercise.
The controversy was primarily as a result of situation that customers wanted to have not less than 0.005 ETH of their wallets by Nov. 15, 2023. There was additionally anger inside the group after a StarkNet group member labeled some customers as “e-beggars”, for which the group later apologized.
A group member who goes by Nikola and @nikola488 on X, expressed his disappointment, citing the mishandling of StarkNet’s airdrop as his cause for leaving the ecosystem.
“The way StarkNet treated the airdrop was essentially a slap in the face to everyone who supported the project until the token launch. The token launch turned out to be one of the biggest failures, leaving no incentive to hold the token or use the chain anymore,” Nikola, who wants to maintain anonymity, said in a Telegram message to The Defiant.
Eduard Jubany Tur, founder of the ZKX decentralized exchange (DEX), noted that it’s challenging to make everyone happy with how airdrops are managed.
“Something you do by way of an airdrop will all the time be seen from the perspective of the farmers and what their pursuits are. It is very troublesome to steadiness the pursuits of everybody and do the proper airdrop,” he advised The Defiant.
In the meantime, the StarkNet Basis just lately introduced that its Chief Govt Officer, Diego Oliva, has stepped down from his function, with out specifying any cause. Oliva had been main the group since March 2023.
Few Compelling Dapps
Eli5DeFi added that StarkNet lacks compelling purposes.
“Onboarding to the StarkNet ecosystem is challenging; there were not many interesting dApps to try,” famous the analysis agency.
Apoorv Sadana, founding father of Karnot, a rollup-as-a-service answer for Madara, which makes use of StarkNet’s stack for constructing app chains, additionally advised The Defiant that StarkNet lacks revolutionary apps.
“We’re now done with our ‘EVM apps written in Cairo’ phase and we need more visionary founders with strong GTM strategies,” he stated, referring to groups merely copying dapps utilizing the StarkNet language. Apoorv stays optimistic that with “the recent influx of fresh talent in the ecosystem and upcoming launches like Kakarot and Madara” the platform’s progress will improve steadily.
This comes as ZKX, the principle perpetual DEX mission on StarkNet, introduced on July 31 that it’s shutting down.
ZKX founder, Tur, stated that the DEX was not “economically viable.”
He famous minimal consumer engagement and drastically lowered buying and selling volumes, with each day income barely masking cloud server bills. Notably, this shutdown happens merely a month after ZKX raised $7.6 million from traders, together with Flowdesk, GCR, and DeWhales.
Tur advised The Defiant that he was conscious the shutdown would impression the StarkNet ecosystem.
“Obviously, no one wants one of the main protocols to shut down in their ecosystem. We knew it would create an impact, even though we didn’t want to, but it’s not like a showstopper anyway.”
StarkNet had $360 million of DEX quantity in July, lower than Linea’s $1.3 billion and Scroll’s $999 million, based on information from DeFiLlama.
Rising Computation
Whereas some stats are down post-airdrop, Abdel Bakhta, Head of Ecosystem at StarkWare, advised The Defiant that “real usage” on StarkNet is definitely on the rise.
“The variety of each day lively wallets is only one of many metrics,” he stated. “The point is that users who are loyal to StarkNet are computing the hell out of it — using it for exactly what it was designed [for], and returning the next day and doing the same.”
On Aug.27, StarkNet processed over 6 million Cairo steps, according to data from Voyager. The highest in 2024 was recorded on Aug.5 when the ecosystem recorded 27 million Cairo steps.
To explain, “Cairo steps” refer to the computational steps or instructions executed within the Cairo programming language on StarkNet. For context, a transfer on StarkNet creates approximately 11,000 Cairo steps, and a swap is around 35,000 Cairo steps.
“If you ask how much usage StarkNet is experiencing, this is best measured in Cairo steps. StarkNet was born for computation and this measures how much computation it’s doing,” Bakhta advised The Defiant.
Boosting Engagement
Bakhta defined that StarkNet is taking a “multi-faceted approach” to extend transaction volumes and increase consumer engagement.
“Firstly, bringing in new developers and supporting the creation of new applications inherently boosts the entire ecosystem,” he provides. “The StarkNet Foundation has user incentive plans to encourage participation and activity on the network. The Foundation also provides seed grants to help developers build new apps, which in turn drives more transactions.”
He talked about the DeFi Spring Program is particularly focused at rising transaction volumes and the Propulsion program will deal with gaming and is “directly aimed at enhancing user engagement.”
Additionally, StarkWare proposed a StarkNet Enchancment Proposal (SNIP) to introduce staking to the Ethereum Layer 2. If permitted by the group, staking can be rolled out in levels, permitting stakers to hook up with StarkNet, work together with staking contracts, and comply with the proposed protocol guidelines.
“We are looking beyond raw numbers, and are aiming to support developers in the creation of high-quality apps that create real, ongoing engagement,” Bakhta added. “In the past six months alone, over 100 new teams have started building new products and apps on StarkNet.”
