Starknet Token Announced!

By Michael @ CryptoEQ | CryptoEQ | 9 Dec 2023

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The Starknet Foundation recently unveiled its strategic plan to allocate over 1.8 billion STRK tokens to various initiatives aimed at bolstering the adoption and expansion of the Starknet blockchain. This ambitious plan is set to commence with its initial phase in the near future.

Central to this initiative is the Provisions Committee, which has been designated 900 million STRK tokens. The committee's mandate is to oversee the equitable, decentralized, and transparent distribution of these tokens. This process is designed to democratize the ownership of STRK tokens while acknowledging both past contributions and incentivizing future participation in the Starknet ecosystem.

In addition to this, another substantial tranche of 900 million STRK tokens has been earmarked specifically for user rebates. This allocation underscores the Foundation's commitment to fostering user engagement and loyalty within the Starknet platform.

Moreover, the DeFi Committee has been allocated 50 million STRK tokens. This committee is tasked with exploring various strategies to incentivize activities on decentralized finance (DeFi) protocols within the Starknet network. The focus of these incentives will be on enhancing liquidity, increasing trading volume, and generally promoting the growth of the DeFi landscape on Starknet. This includes both direct and indirect incentives, as well as retroactive rewards, to stimulate and sustain activity within the DeFi sector on Starknet.

Overall, this strategic allocation of STRK tokens by the Starknet Foundation represents a significant step in its efforts to drive growth and innovation within the Starknet blockchain ecosystem.


Starkware is a ZK-rollup company that pioneered zero-knowledge-based rollups in 2018, launched StarkEx in 2020, and recently released StarkNet in November 2021. StarkEx is a ZK-rollup with less functionality than its StarkNet successor. StarkEx supports the ability for smart contracts to run any arbitrary logic for specific use cases, such as trading and NFTs, while StarkNet enables more general use cases. 

Since its creation in 2018, Starkware has raised $110+ million across three equity rounds and received a $12 million grant from the Ethereum Foundation. Not only is the project backed by heaps of money, but prominent crypto and financial figures, including Pantera Capital, Sequoia, Founders Fund, DCVC, Paradigm, ConsenSys, Multicoin, Polychain, Vitalik Buterin, Naval Ravikant, and others, have also invested in Starkware.


StarkNet uses Zero-Knowledge Proofs to achieve fast transaction times and hyper-scaling without compromising security. An alpha version of StarkNet was launched in November 2021 with limited capabilities to allow developers to begin building on top of the protocol. It fully launched in February of 2022 and is now fully functional for transactions and for building applications. StarkNet is designed so that it benefits from economies of scale, i.e., the greater the number of transactions in a batch, the less gas each participant in the batch must pay. 

As we know, ZK-rollups enable provable computation, i.e., it allows programs to prove they’ve been executed by providing SNARK or STARK proofs without having to re-run/re-execute the transactions. This leads to tremendous scalability improvements. StarkNet is designed to benefit from economies of scale, i.e., the greater the number of transactions in a batch, the less gas each participant in the batch pays.

StarkNet transactions sent by users are batched and delivered to the STARK prover. This STARK prover has the accurate ledger state prior to and following the processing of these new transactions. The prover generates a STARK proof attesting to the veracity of the new state of the ledger. The new state and STARK proof are relayed to the STARK verifier on the Ethereum mainnet, where the proof is verified autonomously by a smart contract.

zk comparisons Source

StarkNet Token

StarkNet token will be used for three purposes (payment, staking, governance): 

1) Network payment - Paying network transaction fees. For a good user experience, users will also have the choice to pay in ETH.

2) Staking - Various services will require staking StarkNet tokens. As for reaching a temporary consensus on the validity of layer 2 transactions before L1 finality is reached, data availability service, a permissionless Proof-of-Stake leader election mechanism, will be implemented for sequencing and proving STARK-compressed transactions.

3) Governance - Governance decisions regarding Starknet operations and updates will be taken by token holders. A minimum voting threshold will be required to pass a governance proposal. Token holders will be able to vote directly or via delegation.

The StarkNet token’s design was made considering the needs of:

1. Users of the network.

2. Operators providing computing resources for various operations, such as sequencing transactions, STARK proof generation, and storage for data availability services.

3. Developers building and maintaining software for the infrastructure of the network and dApps built on top of it.

Starkware minted 10 billion tokens off-chain but, as of November 2022, has deployed the token contract on Ethereum. New tokens will be minted, so the circulating supply of tokens will increase over time. New minting of tokens and a portion of transaction fees paid by users will go to smart contract developers and core developers. 

However, the StarkNet protocol may automatically distribute a portion of fees and new minting of tokens to smart contract developers according to the value their smart contracts provide to users. The exact mechanism for distribution has yet to be confirmed.

Initial allocation of StarkNet token

Stark token distribution

32% - Core contributors (Starkware employees and consultants and StarkNet software developer partners)

17% - StarkNet investors, such as Sequoia Capital, Tiger Global Management, Pantera Capital, IOSG ventures, etc.

50.1% of the token allocation for the StarkNet Foundation will be distributed as follows:

Community Provisions (9%)

To people who performed work for StarkNet and developed its underlying technology and infrastructure and to past StarkEx users. Allocations will be done based on verifiable usage of StarkEx’s technology before June 1, 2022. 

To prevent gamification, snapshots from before the announcement date of the token rewards will be referred to distribute tokens, and additional network usage filtering will be done so that airdrop Sybil hunters don’t receive rewards.

Community Rebates (9%) 

Rebates in StarkNet Tokens will be done to partially cover the costs of onboarding users to StarkNet from Ethereum. To prevent gamification, community rebates will apply to transactions after the rebate mechanism is announced by the StarkNet Foundation.   

12% — Grants for research and work done to develop and maintain the StarkNet protocol.

10% — Strategic reserve will be distributed as ecosystem rewards for the activities that align with the foundation’s mission.

2% — Donations to highly regarded institutions and organizations, such as universities, NGOs, etc., will be decided by StarkNet token holders and the foundation through governance.

8.1% — Unallocated – Foundation’s unallocated treasury tokens will be distributed through governance for the purpose of supporting the StarkNet community.

Tokens allocated to core contributors and investors will be subjected to a four-year lock-up period with the linear release of tokens after a one-year cliff. The vesting schedule for tokens set aside for the StarkNet Foundation has yet to be announced.


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Michael @ CryptoEQ
Michael @ CryptoEQ

I am a Co-Founder and Lead Analyst at CryptoEQ. Gain the market insights you need to grow your cryptocurrency portfolio. Our team's supportive and interactive approach helps you refine your crypto investing and trading strategies.


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