Ethereum scaling solution StarkWare said today it intends to launch a governance token called StarkNet Token, confirming recent speculation promoted by Three Arrows Capital founder Zhu Su.
StarkWare is a company that develops scaling solutions for Ethereum using a technology called Starks. It has two main chains: a permissioned layer called StarkEx — used by decentralized exchanges dYdX (for now) and DeversiFi — and a decentralized layer called StarkNet. The token will be used for StarkNet.
“The token will allow supporters of the community that perform work that contributed to the success of the ecosystem to play a role in the governance of that ecosystem,” said StarkWare in a press release.
So far, 10 billion tokens have been minted off-chain and allocated to parties including StarkWare’s investors and its core contributors. These tokens will go live on StarkNet in September. The team has allocated the token supply across multiple user categories.
Out of this allocation, 17% of the tokens have been earmarked for StarkWare investors. 32.9% of the total supply has been set aside for StarkWare's core contributors, which includes the core team, StarkWare consultants and development partners. Tokens allocated to core contributors and investors will be subject to a four-year vesting period and a one-year cliff.
StarkWare is further establishing the StarkNet Foundation, which will receive 50.1% of the token supply to push the development and adoption of StarkNet forward.
StarkWare said that next year, there will be token allocations to the community based on “verifiable work.” StarkWare added that when such allocations are announced, they will refer only to snapshots prior to the announcement date and will filter for airdrop farmers. StarkWare claimed that it would be “futile to attempt to game the network for speculative purposes.”
StarkNet Token will have three main purposes. The token will be used for governance of the StarkNet blockchain. By 2023, it will be possible to stake the token to contribute toward the performance and security of the layer. Plus, while StarkNet currently uses ether (ETH) for transaction fees, this will eventually be replaced by the new token.
Anticipation of a StarkWare token had been widespread for many months, as speculators estimated that it would follow in the footsteps of other scaling solutions. This was especially the case since StarkWare always maintained that it would decentralize the network to its community, something that typically involves a token for crypto projects.
Yet this reached fever pitch on July 12 when Zhu broke his silence on Twitter and shared screenshots of two emails. These emails contained reference to a StarkWare token and a purchase agreement, implying that Three Arrows Capital had invested in a potential token. It was this unexpected disclosure that prompted StarkWare into making today’s announcement.
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