Starknet Price Jumps After Ethereum Scaler Bows to Pressure Over Token Unlock Schedule

StarkWare, the startup behind the Ethereum scaling network Starknet, announced Thursday that it will revise its STRK token allocation schedule for contributors and investors following backlash from the crypto community.

The company will spread out its allocations over the course of years rather than conducting a sizable planned STRK unlock this April. The price of STRK jumped following the announcement, according to CoinGecko, rising from $1.86 to $2.03 in a matter of minutes before settling to just under $2 as of this writing. The token is up 9% on the day.

StarkWare had initially planned to unlock 1.3 billion STRK tokens for investors and early contributors on April 15, following this Tuesday's token launch. The short cliff had been controversial among Starknet users and across the broader crypto community, amid fears that such a sizable unlock (about 13% of the total STRK supply) could impact the token's price.

Under the revised plan, StarkWare will unlock 64 million tokens monthly for the first year starting April 15, and then 127 million tokens monthly for the 24 months thereafter.

This spreads out the token unlocks, with 580 million tokens set to unlock for contributors and investors by the end of 2024, with another 1.4 billion STRK unlocked in 2025 and a further 1.5 billion STRK set to unlock for those people in 2026.

In a tweet, StarkWare co-founder and CEO Eli Ben-Sasson wrote that his company "listened to concerns re: long-term alignment of StarkWare w/ Starknet ecosystem," "proposed a more gradual release schedule," "[believes] trust is earned with actions, not just words," and "[thanks] investors for their support on this."

Ben-Sasson had previously brushed off criticism over the token unlock schedule after the token launch plans were revealed last week.

“The unlocking for the team and early investors… is one aspect in which we may be non-standard,” Ben-Sasson told Decrypt last week. “But we build different and we view things a little bit differently.”

Starknet's token launched this Tuesday with a massive airdrop to nearly 1.3 million eligible wallets, but the price fell sharply thereafter. It's currently down 55% from the peak price of $4.41 achieved on Tuesday, though it has rebounded from a low of $1.70 on Wednesday.

Editor's note: This story was updated with additional details after publication.