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Starknet, the Ethereum Layer 2 network, marked a significant milestone with the launch of its highly anticipated token. The event, which took place yesterday, saw an airdrop of 700 million STRK tokens distributed to developers and early users.
The debut of STRK saw it soaring above $3, propelling the project's valuation above $30 billion on a fully diluted basis and making the airdrop worth $2.1 billion – a record-breaking feat in the crypto industry.
Record-breaking Airdrop Surpasses Previous Milestones
The historic airdrop surpassed previous milestones set by leading Layer 2 network Arbitrum, which boasted a total value locked (TVL) of $12.4 billion.
Arbitrum's token, ARB, launched with a market cap of $13 billion, valuing its airdrop at $1.5 billion. Since the launch of STRK, nearly half a million users have claimed 424 million STRK tokens, according to data from a Token Flow dashboard.
At present, STRK is trading around $1.80, implying an FDV of $18 billion, which aligns closely with Arbitrum and Oracle provider Chainlink and surpasses Optimism, the second largest Layer 2 network, in terms of valuation.
Understanding the Significance of Airdrops in the Market
Airdrops are a strategic tool to attract investors and foster community engagement during the initial stages of a token's introduction.
According to Defiant Labs, companies can build brand recognition and cultivate a dedicated user base by offering free cryptocurrency tokens. Additionally, airdrops contribute to increasing the overall supply of tokens. However, they can also introduce volatility into the market, potentially leading to price fluctuations as token availability impacts demand and scarcity.
Having Volatility in the Market
While the launch of the STRK token witnessed an immediate surge in value, it was followed by a subsequent drop of over 20% attributed to the airdrop.
Medium says such fluctuations are common during token listings and airdrop events.
Despite the volatility, STRK has been listed on major centralized exchanges like Binance and Kucoin, signaling continued interest and support from the cryptocurrency community. As of now, STRK is trading at $1.87, with a trading volume of $1,872,988,344, underscoring the dynamic nature of the crypto market.
Photo: Shubham Dhage/Unsplash
