Ethereum Layer 2 StarkWare confirms the StarkNet token
Important takeaways
- StarkWare has confirmed that it plans to launch a token for its StarkNet network.
- The new token will be used for chain management, payment of transaction fees on the StarkNet Layer 2 network and rewards of operators for processing transactions.
- 50.1% of the total token supply will be distributed by the StarkWare Foundation through various community-oriented initiatives.
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StarkWare plans to launch the StarkNet token on the chain in September.
StarkWare announces token
Another Ethereum Layer 2 project launches its own control token.
According to a blog post on Wednesday, Ethereum Layer 2 developer StarkWare plans to launch a control token for its StarkNet network.
The new StarkNet token will serve as a way for StarkWare to put the network’s management and development in the hands of society. In addition, the token will be used to stimulate community operators – people who provide the network with computer resources that perform transaction sequencing and STARK proof generation. According to posts announcing the new token, gas fees on the Layer 2 network will be paid with the StarkNet token, and part of the fees will be rewarded to operators for processing transactions.
StarkWare currently operates as StarkNet’s sole operator responsible for processing transactions. In the future, the company plans to hand over operational tasks to the community, a decentralization initiative of which the StarkNet token will be an integral part. «StarkNet will not rely on a single company as operator. Businesses may cease to exist, or may decide to cease operating the network. After decentralization, such scenarios will not destroy StarkNet, “the company explained.
To achieve its decentralized vision, StarkWare plans to distribute tokens to the company’s investors, employees and consultants, as well as community developers, contributors and end users. The company has already minted 10 billion StarkNet tokens outside the chain and has allocated them to StarkWare’s investors and to StarkNet’s core contributors. These initial tokens are set to be distributed on the chain in September as ERC-20 tokens and will be requested for use in management and voting on network upgrades. A more general community token allocation administered by the StarkWare Foundation is also planned for next year.
The current StarkNet token distribution provides 17% of the supply to StarkWare investors, 32.9% to core contributors (such as StarkWare and its employees and consultants), and the remaining 50.1% to the StarkWare Foundation – a non-profit organization dedicated to maintain StarkNet as a public good. To align the long-term incentives of core contributors and investors with the interests of the StarkNet community, all tokens awarded to core contributors and investors will be subject to a four-year lock-in period, with linear release and a one-year cut.
The announcement of the StarkNet token follows a Tuesday tweet from Three Arrows Capital’s co-founder Su Zhu which alluded to the company’s decentralization plans. E-mail correspondence between Zhu’s lawyers and counterparty liquidators referred to a “StarkWare token takeover offer” received by Three Arrows after the firm invested in the company’s financing round earlier this year, leading to widespread speculation that StarkWare had a token in progress.
Disclosure: At the time of writing, the author owned ETH and several other cryptocurrencies.
