The price of the recently launched Ethereum layer 2 network token, Starknet (STRK), has undergone a significant decline within just two days of its inception. Following its airdrop to select blockchain users, the token's value plummeted by nearly 60%, dropping from a peak of $4.41 on February 20 to below $1.90, as reported by CoinGecko.
Starknet experienced a brief surge in value, reaching as high as $7.70 after its listing on the Binance exchange. However, the token's price has since plummeted by 75.4%, prompting concerns among investors. Notably, blockchain analyst Lookonchain highlighted the token's downward trajectory since its launch, shedding light on significant sell-offs by Ethereum infrastructure company Nethermind, which unloaded 3.41 million STRK tokens valued at over $6.7 million.
Further exacerbating the situation, airdrop hunters have also been active in consolidating large amounts of STRK tokens, leading to intensified selling pressure in the market. Lookonchain identified instances where millions of airdropped STRK tokens were transferred from numerous wallets to single addresses, raising apprehensions about continued selling activities.
Questions have also arisen regarding the unlocking schedule for STRK tokens, which allocates a substantial portion of the token supply to Starknet investors and contributors. Approximately 1.3 billion STRK tokens, constituting 13% of the total supply, are set to be released around two months post-launch, further influencing market dynamics and investor sentiment.
Despite the price decline, Starknet has witnessed significant engagement, with a substantial portion of the allocated tokens already claimed by eligible recipients. The success of the STRK airdrop was evident, with 45 million tokens acquired within a short span after distribution commenced. Moreover, Starknet boasts a noteworthy total value locked (TVL) of $73.5 million, reflecting continued interest and participation in the network's ecosystem, as reported by DefiLlama.
