StarKnet Token Plummets Over 40% in 24 Hours After Airdrop Listing
The StarKnet token (STRK) has experienced a significant drop of over 40% in the last 24 hours after its airdrop listing. Currently trading at $1.87, the tokenโs value has seen a sharp decline since yesterday, causing concern among investors about its long-term performance.
The drop in value can be attributed to the recent airdrop of 728 million STRK tokens by the StarKnet team, which accounts for 7.3% of the total supply. The airdrop was distributed to early adopters, Ethereum community members, developers, and authors of EIP.
However, the airdrop resulted in a decrease in the number of StarKnet users. Despite reaching around 225,000 active wallets by February 14th, the active user count dropped to 84,260 on the day of token distribution.
Understanding The StarKnet Token
StarKnet is a layer 2 solution that offers high scalability and flexibility. It operates on a proof-of-work (POW) consensus mechanism and enables multi-token transactions. The token debuted with a market cap of $1.5 billion and achieved a trading volume of $900 million on its first day.
StarKnet is available on both decentralized exchanges like Uniswap and centralized exchanges like Binance. In the initial minutes after launch, over five million native StarKnet tokens were claimed by investors at a rate of one million tokens per minute.
Why Do We See So Frequent Airdrops in the Market?
Airdrops serve as a means to attract investors and build a community around a new token. It helps generate awareness and interest in the token by offering free cryptocurrency to users. Additionally, airdrops can increase the tokenโs overall supply.
However, airdrops often create market volatility and can lead to a decrease in token price. The availability of free tokens reduces their scarcity, resulting in reduced demand.
Similarly, the StarKnet token experienced a drop in price following its airdrop. However, some investors were able to profit from the tokenโs initial low price on centralized exchanges, which saw a 7% increase shortly after launch.
Conclusion
The StarKnet token initially saw a significant surge in value but quickly lost over 20% within a day due to the airdrop. Currently trading at $1.87 with a trading volume of $1,872,988,344, the token has been listed on major centralized exchanges like Binance and Kucoin. It is common for tokens to experience fluctuations during the listing and airdrop periods.
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