Following the huge hint leaked by Zhu Su, co-founder of Three Arrows Capital (3AC), Ethereum scaling solution StarkWare today confirmed the launch of a governance token. Called the StarkNet token, it will be used to help decentralise the network and reward operators for validating transactions.
StarkWare confirms StarkNet token
It’s the turn of another Ethereum second-layer solution to launch its token. In a statement released on Wednesday, StarkWare confirmed its intention to launch a governance token for the StarkNet network. Let’s decipher together what this means.
As a reminder, StarkWare is a company that develops a scaling solution for Ethereum. At the moment, these second-layer technologies appear to be essential in an ambition to adopt and use blockchain on a large scale.
Concretely, StarkWare has two main products: StarkEx and StarkNet. The first is an engine dedicated to improving the scalability of Ethereum and the second is a second layer network for Ethereum, based on ZK-Rollup technology. The latter is where the token will be used.
In its press release, StarkWare described this future token as follows:
According to the release, the StarkNet token will serve three main purposes. First, it will be used for the governance of the StarkNet blockchain. Second, by 2023, it will be possible to spend it to contribute to the performance and security of the network. Finally, it will replace Ether (ETH) as the currency for paying transaction fees.
How will StarkNet tokens be distributed?
At the time of writing, 10 billion tokens have already been mined. Moreover, their allocation has already been defined among different categories of users, ranging from StarkWare’s investors to its main contributors.
According to the release, they will be distributed and available from September. After that, the community will decide on the timeframe in which StarkWare will distribute the new tokens. Furthermore, it is specified that the quantity of tokens in circulation will not be fixed in any way.
Regarding the allocation, it is stated that 17% of the total quantity will be reserved for StarkWare investors. Then 32.9% has been allocated to the main contributors of StarkWare. This includes the founding team, StarkWare consultants and development partners.
StarkNet token distribution breakdown
Finally, the release states that the StarkNet Foundation will receive 50.1% of the token offering to further the development and adoption of StarkNet. More specifically, it is stated that the community will share 9% of the total amount of tokens in circulation.
Specifically, this will include “those who have worked for StarkNet and have powered or developed its underlying technology, for example through past use of StarkEx L2 systems”. In other words, this specifically targets individuals who used the dYdX or Immutable X protocols until 1 June 2022. As for the aidrop, it seems that it is only planned for the year 2023.
For the rest, 12% will be distributed in the form of grants for research, development, testing, deployment and maintenance of the StarkNet protocol. Finally, there is an 8.2% share that has not yet been allocated. It will be up to the community to decide how it will be used
Is there a way to receive StarkNet tokens
The simple answer is yes. However, StarkWare is working to prevent anyone from working for the sole purpose of getting these tokens for free. In other words, the company seems determined to distribute them to individuals involved in the ecosystem.
Firstly, developers who have already built a tool, software or application that is actually appreciated and used by StarkNet end-users can expect to receive tokens. Similarly, if they contribute to the development and maintenance of the protocol.
With regard to end users, StarkWare insists that the use of StarkNet should only be for genuine need. Specifically, the release states that:
If you are an end user, use StarkNet […] for the transactions and applications you value, not in anticipation of future reward in StarkNet tokens. “
For several months, the announcement of a StarkWare token was an open secret. Indeed, StarkWare has always maintained that it would decentralise the network through its community, which usually involves the creation of a governance token.
More recently, the situation came to a head on 12 July when Zhu Su, the co-founder of Three Arrows Capital (3AC), leaked personal emails in which the existence of this StarkNet token was clearly revealed. Furthermore, it implied that 3AC was waiting to receive some of these tokens.
It is certainly this unexpected revelation that prompted StarkWare to make today’s announcement. However, the community has been relatively perplexed by this announcement. Will the flame of excitement continue to glow if 3AC’s involvement in StarkWare is officially verified?
