Although the STRK token, belonging to StarkNet, was launched back in November 2022, it only became tradable on February 20. Since then, the project has attracted significant attention and has quickly risen to 64th place on the list of top 100 cryptocurrencies by market capitalization. But what explains this sudden hype? And what exactly is the function of this project?
What is StarkNet?
StarkNet is an advanced Layer-2 scaling solution developed on the Ethereum blockchain. It uses zero-knowledge (ZK) proofs to make transactions faster and more efficient, without compromising security.
ZK-proofs allows StarkNet to process a significant amount of transaction data off the Ethereum main chain, then return it in a compressed form for validation. This process significantly increases the capacity and speed of the network, while maintaining the security and decentralization of Ethereum.
Why is StarkNet such a big hype?
The growing enthusiasm for StarkNet can largely be attributed to a sizable airdrop, which saw an impressive 1.8 billion STRK tokens released.
Prior to this airdrop, DeFiLlama recorded a significant increase in the total value of assets invested in DeFi protocols on StarkNet, which peaked at $56 million. This growth was significantly boosted by the contributions of decentralized applications (dApps), led by Nostra.
Furthermore, thanks to the contribution of the Ekubo protocol, StarkNet saw record levels of trading volume since its launch in November. These increases in both total asset values and trading volume underscore growing commitment and trust in StarkNet’s DeFi ecosystem.
Selling pressure after airdrop
Since the airdrop, the digital coin has suffered a depreciation of more than 50%, a phenomenon that is not uncommon in the crypto world. This decline is mainly attributed to massive sales by airdrop hunters and large receivers, including Nethermind. Nethermind, a software company specialized in the development of Ethereum-based infrastructure and solutions, has had a significant impact on this trend.
Nethermind alone has sold over $6.7 million worth of STRK tokens. Analysts indicate that the selling pressure may continue as Nethermind still owns tokens worth more than $12 million. This situation suggests that the company can continue to influence the market with future sales, keeping pressure on the price of the coin.
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Source: https://newsbit.nl/wat-is-starknet-en-waarom-is-het-zon-grote-hype/
