Ethereum: the second Starknet layer launches its governance token

One more token for L2s – Faced with the rise of decentralized finance, the blockchain Ethereum experienced significant congestion phases. These have inexorably driven transaction costs upwards. To overcome this problem, many second-layer solutions have emerged. For several months, the latter have been launching their governance token in turn. It is now the turn of Starknet to advertise its own token.

Starknet: one of the favorites in the L2 race

Starknet is a second layer solution developed by the company starware. This takes the form of a zk-Rollup. This solution makes it possible to deport transactions outside the Ethereum chain while inheriting its security.

Starknet differs from other layer 2 by integrating a new programming language for the smart contract : the Cairo. This replaces the Solidity usually used on EVM-compatible blockchains.

Launched in November 2021, the project already counts many initiatives, both on the testnet and the mainnet. Now, Starknet want to move up a gear decentralizing its governance.

A governance token for Starknet

On Wednesday July 13, the StarkWare teams published a series of 3 articles presenting their governance decentralization plan.

Thus, to manage and decentralize governance, StarkWare announced the creating a Starknet-specific token.

As we have seen previously, this one will have a role in governance. Additionally, the token will also be used for pay network charges. Finally, it could be staked to participate in the consensus of the protocol.

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“A permissionless proof of stake mechanism for electing a leader and paying on-chain transaction fees, both using a native token, will allow the network to operate reliably as an L2 on Ethereum, even if StarkWare should cease to exist.”

In addition, StarkWare takes the opportunity to create the Starknet Foundation whose mission will be to develop Starknet as a public good.

Distribution of the token

For now, 10 billion tokens have been issued and will be distributed to the main contributors of the project. The distribution of this initial tokenization will be as follows:

  • 17% for StarkWare investors;
  • 32.9% for StarkWare, its employees and consultants;
  • 50.1% to the Starknet Foundation:
    • 9% for those who have worked for StarkNet and who have powered or developed its underlying technology, for example, through past use of StarkEx L2 systems;
    • 9% to apply community discounts. Discount in StarkNet tokens to partially cover the cost of onboarding to StarkNet from Ethereum;
    • 12% to fund research and work performed to develop, test, deploy and maintain the StarkNet protocol;
    • 10% allocated to a strategic reserve, to fund ecosystem activities, which are aligned with the mission of the Foundation;
    • 2% for donations to well-known institutions and organizations, such as universities, NGOs, etc.,
    • 8.1% which will be unallocated. They will further support the StarkNet community, their use will be decided by the community.
Distribution of the Starknet token.
Distribution of the Starknet token.

Subsequently, other tokens will be created through the process of securing the chain. Thus, there will eventually be much more than 10 billion tokens.

Some criticisms of the distribution are heard

The distribution of Starknet tokens primarily rewards StarkWare as well as core Starknet contributors.

Unlike many projects that promote community distribution via airdrops, Starknet has chosen not to go through this mode of distribution.

Not surprisingly, this lack of community distribution has been raised by many netizens. The latter criticize StarkWare for announcing, wanting to, transferring governance to the community, without really involving the community by allocating tokens to it.

Conversely, netizens point to a distribution in which StarkWare and its associates pocket most of the tokens. A mode of distribution favoring VCs to users.

Note, however, that the Starknet Foundation has an allowance which may soon be distributed in the form of a airdrop if that is his choice. Thus, Starknet could well promote developers to continue to evolve the solution before rewarding users.

For its part, the second layer solution Optismism launched its token at the end of May. Its launch was marked by a first airdrop wave for users.

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