StarkWare Makes Dramatic Token Lockup Adjustment: What Happened to the Planned 1.34B Tokens?

TL;DR

• StarkWare Adjusts Token Lockup Schedule: StarkWare, the startup behind Starknet, has revised its token lockup schedule for early contributors and investors in response to community criticism.
• New Gradual Unlocking Timeline: StarkWare will implement a more gradual unlocking timeline. On April 15, only 0.64% of the original 10 billion tokens (64 million tokens) will become available for use.
• CEO’s Statement on Revised Schedule: StarkWare Co-Founder and CEO Eli Ben-Sasson stated that the company listened to concerns about the long-term alignment of StarkWare with the Starknet ecosystem and proposed a more gradual release of the tokens to earn the community’s trust.
  

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StarkWare, the startup behind the scaling solution Starknet, has announced a significant adjustment to its token lockup schedule for early contributors and investors. The decision comes in response to criticism from the cryptocurrency community regarding the initial plan, which was perceived to disproportionately favor insiders.

Important update:

After listening to feedback from ecosystem friends and collaborators, we are changing the lockup schedule for StarkWare’s early contributors and investors to make it more gradual.

We value this community and want to earn its trust by building great tech that…

— StarkWare (@StarkWareLtd) February 22, 2024

The Starknet Foundation began its airdrop of the STRK token earlier this month, with around 49.9% of the total supply allocated to core contributors and investors. Initially, these tokens were under a four-year restriction period, with a one-year milestone due to end on April 15. This arrangement was designed to ensure a controlled release of the tokens.

However, the project drew sharp criticism in the wake of its airdrop, particularly for its approach to vesting. In response to the feedback, StarkWare has decided to implement a more gradual unlocking timeline. On the specified date of April 15, a mere 0.64% of the original 10 billion tokens, which translates to 64 million tokens, will become available for use. This is a significant reduction from the initially planned 13.4% (1.34 billion tokens).

Details of StarkWare’s Revised Token Release Schedule

Under the revised schedule, tokens will be released at a slower pace. Specifically, a monthly rate of 0.64% (equivalent to 64 million tokens) will be maintained until March 15, 2025. Following this period, the rate of release will increase to 1.27% per month for the subsequent 24 months, ending on March 15, 2027. 

As a result of this new schedule, only 580 million tokens are expected to be released by the end of the current year, a significant reduction from the initially planned 2 billion tokens. This approach ensures a more gradual distribution of tokens.

StarkWare Co-Founder and CEO Eli Ben-Sasson said in a press release: 

“Over the past few days, we listened carefully to concerns regarding the long-term alignment of StarkWare with the Starknet ecosystem. Accordingly, we reviewed the lockup schedule and proposed a modification with a more gradual release of the tokens.” He added, “We want to earn the community’s trust, and believe in showing this with actions as well as words.”

The STRK token is currently trading at $2. The new schedule is expected to mitigate concerns of large sell-offs, benefiting retail users.