The Launch of Starknet (STRK) and the Expected Market Cap
The STRK token of Starknet is set to be launched on the markets on February 20th with a potential market cap of $1.2 billion. According to the future pre-launch on the decentralized exchange Aevo, the expected launch price is around $1.7 per token.
The announcement of the airdrop of Starknet’s STRK tokens was made by the Starknet Foundation. The airdrop will reward approximately 1.3 million users who have participated in the system’s testing and support over the past months.
A total of over 728 million STRK tokens will be launched, and if their initial market price remains around $1.7, the initial market capitalization would be approximately $1.24 billion.
However, since these tokens are given away through automatic distributions, many recipients may decide to sell them, potentially affecting the token price. The success of the Starknet project will also play a significant role in determining whether people hold or sell their STRK tokens.
The Starknet Layer-2
Starknet is a layer-2 Validity-Rollup (ZK-Rollup) solution built on Ethereum. It allows decentralized applications (dApps) to scale massively while maintaining security.
The Starknet smart contract has been operational for over a year but did not have its own token until now. With the upcoming airdrop, the STRK token will make its debut on crypto markets next Tuesday.
Starknet achieves scalability by moving transaction processing off the main Ethereum network and executing it off-chain. It then summarizes the transactions into batches and writes a single on-chain transaction for each batch, significantly reducing fees while ensuring transaction integrity.
Starknet is not the only layer-2 solution on Ethereum that operates in this way. Competitors like Arbitrum, Polygon, and Optimism also offer similar scalability solutions.
Will the Starknet Token (STRK) Reach a $1 Billion Market Cap?
On the decentralized exchange Aevo, STRK futures were introduced after the airdrop announcement. The initial price was $1 but experienced high volatility, dropping to $0.5 within the first hour.
The price of STRK futures then fluctuated significantly, briefly surpassing $2 before stabilizing around $1.7. Speculators seem to be betting on this price for the STRK token.
The STRK token will have value as it will be used for community participation and governance within the Starknet project. A market capitalization of $1.2 billion would place STRK among significant tokens like DYM, BLUR, FTM, SAND, BTT, and XTZ.
The Rollups on Ethereum
Rollups are currently considered the best medium-term solution for Ethereum scalability. These layer-2 solutions reduce transaction costs without compromising security.
While the upcoming Denunc update will introduce proto-danksharding on the Ethereum blockchain, rollups will still be necessary until actual sharding is implemented in the future.
Starknet currently has a TVL (Total Value Locked) of $55 million compared to Arbitrum’s almost $3 billion. Arbitrum is currently the most widely used layer-2 solution on Ethereum, particularly in the DeFi sector.
Starknet may face competition from other rollup solutions such as Arbitrum, Polygon, and Optimism. However, with its growth since last year and its unique features utilizing STARK proofs, Starknet has the potential to establish itself as a prominent layer-2 solution on Ethereum.
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