Ethereum Layer 2 StarkWare Confirms Long-Rumored StarkNet Token

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Ethereum Layer 2 StarkWare Confirms Long-Rumored StarkNet Token

StarkWare has revealed that it plans to launch a token for its StarkNet network. The new token will be used to assist in decentralizing Layer 2 network ownership and to incentivize operators for validating transactions.

StarkWare Reveals Launch of StarkNet Token

StarkWare, an Ethereum Layer 2 developer, announced on Wednesday that it plans on launching a governance token for its StarkNet network. The new StarkNet token will enable StarkWare to place network governance and development in the hands of its users.

Furthermore, the token will be used to reward community operators—people who provide computational power to the network in order to sequence transactions and generate STARK proofs. According to posts introducing the new token, gas charges on the Layer 2 network will be paid with the StarkNet token, with a portion of the fees going to operators for processing transactions.

StarkWare is currently StarkNet’s sole operator in charge of transaction processing. In the future, the company intends to transfer operational responsibilities to the community, a decentralization project that the StarkNet token will play a key role in implementing. The firm stated:

“StarkNet will not rely on a single company as its operator. Companies can cease to exist, or may decide to stop servicing the network. After decentralization, such scenarios will not bring down StarkNet.”

No Community Airdrops Until Next Year

StarkWare plans to distribute tokens to its investors, staff, and advisors, as well as community devs, contributors, and end-users, in order to fulfill its decentralized ideal. A total of 10 billion StarkNet tokens have been generated off-chain and distributed to StarkWare’s investors and the network’s key contributors.

These initial tokens are scheduled to be distributed on-chain as ERC-20 tokens in September and will be used for governance and voting on network developments. A more wide community token distribution managed by the StarkWare Foundation is also planned for next year.

The present StarkNet token allocation structure allocates 17% of the supply to StarkWare investors, 32.9% to key contributors (such as StarkWare and its staff and advisors), and the remaining 50.1% to the StarkWare Foundation—a non-profit entity tasked with keeping StarkNet running as a public good.

All tokens awarded to core contributors and investors will be locked up for four years, with linear release and a one-year cliff, to match the long-term incentives of key contributors and investors with the interests of the StarkNet community.

Starware Seeks Decentralization of Network

For several months, there has been widespread speculation that a StarkWare token would follow in the footsteps of existing scaling solutions. This was largely due to the fact that StarkWare has always indicated that it will decentralize the network to its community, which normally entails a token for crypto projects.

However, on July 12, Zhu broke his quiet on Twitter and released screenshots of two emails, escalating the situation. These emails made mention of a StarkWare token and a purchase agreement, hinting that Three Arrows Capital had made an investment in a potential token. This surprising revelation spurred StarkWare to make today’s announcement.

Rony Roy

Rony Roy is an electrical engineer turned tech author in the Cryptocurrency space. He got block-chained in 2012 and fell in love with tech and its use-cases and has been writing his way through innovations in this emerging sector. Over the years, he has worked with multiple Blockchain projects and premier cryptocurrency exchanges both national and international.