StarkNet Token Deployed On Ethereum

Published on: 18.11.2022
StarkNet Token Deployed on Ethereum

The StarkNet Token (STRK) is now deployed on Ethereum Mainnet.  STRK will be used as a staking token for participation in StarkNet’s consensus mechanisms, as a Governance token, and for paying transaction fees.

Tokens held by StarkWare shareholders, employees, and independent partner software developers are locked for a four-year period, with a gradual release starting after one year.

Token Allocation Process

Locked tokens can be used for voting and staking, but cannot be transferred or traded. Some of the tokens are locked via a dedicated smart contract on Ethereum while other tokens are locked via custodians.

Separately, 50.1% of the existing StarkNet tokens are allocated to the StarkNet Foundation, to be used to meet its goals. These tokens are not locked. However, the Foundation will need time to formulate the exact mechanism to further allocate those tokens and will share its plans in due time.

Why Is It Lockup?

Locking the tokens for the aforementioned period ensures that current contributors align with the long-term incentives of StarkNet. It also discourages speculation over the token in advance of widespread usage for its intended purposes: securing the network, paying fees, and decentralizing governance.

Voting

The Foundation will be in charge of facilitating sound governance and formulating the voting mechanisms. The StarkNet Token was designed to allow both direct voting and a range of delegation mechanisms.

For L1 Voting

Furthermore, the ERC-20 implementation deployed now includes the optional use of Compound’s delegation module. Additionally, this module is widely used for on-chain voting. The reason it’s optional on StarkNet, and turned off by default, is a cost consideration. Turning it on means that every transfer of the StarkNet Tokens on L1 requires extra gas. It is needed solely for the purpose of tracking shifts in voting power.

Non-L1 Voting

The alternatives to L1 on-chain voting with Compound’s delegation module include off-chain voting, as well as StarkNet-based on-chain voting systems (such as SnapshotX). These alternatives, which significantly reduce gas consumption for L1 transfers, don’t require explicit support from the ERC-20 code currently deployed, and are thus inherently supported.

Staking

StarkNet’s permissionless and censorship-resistant operation requires a random selection of sequencers. The probability of a node being selected to sequence and propose a block is proportional to the number of StarkNet Tokens that node stakes. In addition, the rationale for using StarkNet Tokens (rather than, say, Ethereum or Bitcoin) is explained in the governance proposal. The exact details of staking, sequencing, and block creation on StarkNet are under ongoing discussion by the community and are yet to be finalized.

ABOUT StarkNet

StarkWare develops STARK-based solutions for the blockchain industry. Its products facilitate secure, trustless, and scalable blockchain applications.

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