StarkWare CEO Responds to Criticism Surrounding Starknet's STRK Token Airdrop

Despite mixed reactions from the cryptocurrency community, StarkWare remains steadfast in its distribution plan for the STRK tokens on Starknet.

StarkWare CEO Responds to Criticism Surrounding Starknet's STRK Token Airdrop

Starknet Unlocks 13% of Total Supply of STRK Just 2 Months After Airdrop
As reported by Coin68, on February 14th, Starknet, a layer-2 solution on Ethereum, disclosed details of its airdrop event involving 700 million STRK tokens to early adopters and contributors to the project's development. The airdrop date is set for February 20, 2024.

However, many cryptocurrency users, upon discovering they did not meet the eligibility criteria for the airdrop, have criticized Starknet for setting overly stringent standards and allegedly favoring developers over early supporters who have spent hundreds of USD but received nothing in return, while developers only needed to make minor contributions like fixing spelling errors to qualify for the airdrop.

Tensions escalated further when concerns were raised about the token unlocking schedule for STRK. According to this, by April 2024, merely 2 months after the airdrop, Starknet plans to release 13% of the total token supply to its development team and investors, tripling the circulating token supply at that time.

Based on current early trading prices of STRK, these tokens would be valued at up to $2.15 billion USD. The premature unlocking of tokens has raised fears of significant sell-offs.

Typically, project tokens and investor allocations are locked for a year following the Token Generation Event (TGE) to reduce selling pressure and demonstrate long-term commitment. However, in Starknet's case, the project set its TGE date in November 2022 when the STRK smart contract was deployed. By November 2023, Starknet announced a delay in token unlocking for investors and the team to April 2024, citing ongoing readiness issues.

Nevertheless, the cryptocurrency community feels misled by StarkWare's calculation of its TGE, arguing that the project lacked transparency and clarity. By choosing such an early TGE date, Starknet essentially shortened the wait time for token unlocking, allowing investors and the project to receive funds just 2 months after the airdrop event.

Amidst the controversy, many dug up a previous statement from a Starknet developer declaring the project owed users nothing and constantly demanded airdrops, labeling them as "beggars". The CEO subsequently issued a public apology to the community for these insensitive remarks.

Another user pointed out that StarkWare had previously raised $225 million USD at an $8 billion USD valuation but still needed to push back the token unlocking schedule for the development team.

CEO StarkWare Offers Explanation to the Community
In an interview with Decrypt, StarkWare CEO Eli Ben-Sasson acknowledged that STRK's allocation mechanism differs from conventional projects in the cryptocurrency industry. However, he declined to alter the distribution plan to appease the community. He stated:

"The unlocking schedule for the development team and investors is an aspect where we deviate from the standard practice. However, at Starknet, our approach to building is distinct, and therefore, everything is evaluated from a different perspective."

Ben-Sasson explained that the extended lockup period was designed to increase trust in the team behind the airdrop. Nevertheless, he believes there are other factors that represent that trust, and the StarkWare CEO is confident that Starknet's past actions have affirmed its seriousness and what the project can achieve in the long term.

Ben-Sasson added:

"Let's address the most pressing issue now. People are concerned whether StarkWare's developers and Starknet will continue to support and build the project wholeheartedly over the next 3 months or 1 year. Let me state this officially as the CEO of StarkWare: the sole objective of StarkWare's 150-member team in the coming period will be to continue expanding Starknet."

The CEO also cited his own example of resigning from a professorship at a prestigious university in Israel to work for StarkWare, with no intention of returning to his previous job.

Regarding concerns that investors will sell off tokens immediately upon unlocking, Eli Ben-Sasson believes this scenario will happen sooner or later. Starknet decided to shorten the token unlocking time because they believe investors deserve to be rewarded for their early support of the project and do not want to impose the risk that the project team will use the token allocation mechanism for personal gain. He concluded:

"There's no need to unnecessarily delay token unlocking when we're confident we will continue to have a long-term commitment to Starknet."