The recent launch of Starknet's STRK token within the Ethereum Layer-2 ecosystem experienced a significant decline in value shortly after its introduction.
Despite the initial surge in interest and a high opening price of $7.41 per STRK token on Binance, the price fell to $1.87 at the time of writing due to airdrop farmers and Nethermind selling millions of dollars worth of the token.
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These tokens were designated for various stakeholders within the ecosystem, ranging from Starknet users and developers to Ethereum enthusiasts and even non-Web3 open-source contributors.
Launched on February 20, the airdrop involved the distribution of 728 million STRK tokens from a total pool of 10 billion. Remarkably, 45 million STRK tokens were claimed within the first hour and a half, with claims eventually surpassing 220 million tokens.
Before the airdrop, Yearn Finance anonymous lead developer Banteg warned that 1,854 users seemingly renamed or deleted their profiles after capturing their GitHub snapshots to achieve eligibility for the forthcoming Starknet airdrop.
According to Banteg, a closer look revealed that 1,175 of these altered accounts are linked by identical GitHub IDs, meaning that over 700,000 wallets eligible for the airdrop are potentially linked to exploitative activities by airdrop hunters.
After the airdrop had launched, Lookonchain reported instances of airdrop hunters consolidating significant amounts of STRK tokens into single addresses, indicating a strategic approach to selling off airdropped tokens for profit.
Lookonchain also noted that Nethermind offloaded 3.41 million STRK tokens, totaling over $6.7 million in value. This move, coupled with the potential for continued sales given Nethermind's remaining holdings, has raised concerns about ongoing price pressure.
Nonetheless, the Starknet protocol maintains a substantial valuation, with its total value locked (TVL) rising to $76.95 million. In addition, its fully diluted market cap soared beyond the $20 billion mark.
Participants still have until June 20, 2024 to claim the tokens.
This was not the only point of discussion surrounding the airdrop. Starknet users were also disappointed that those holding less than 0.005 Ether in their accounts as of November 15, 2023, were to be disqualified.
