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Ethereum Layer 2 Wars: StarkNet Launches STRK Token, zkSync Raises $200M

2 mins
Updated by Kyle Baird
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In Brief

  • StarkNet has deployed its STRK token on the Ethereum mainnet.
  • The StarkNet Foundation will determine how to distribute the tokens, which will not be offered via sale.
  • zkSync developer Matter Labs has also been making progress and raised $200 million in a Series C funding round.
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Ethereum layer 2 scaling solution creator StarkWare has deployed its STRK token on the Ethereum mainnet. Meanwhile, zkSync developer Matter Labs raised $200 million.

Ethereum layer 2 scaling solution StarkWare has launched its highly anticipated STRK token, the team announced on Nov. 16. The token has only been deployed on Ethereum, with the StarkNet soon set to decide how it will be distributed. The tokens are not being offered via sale.

StarkNet rolls out STRK token

The token has utility in governance, staking, and paying network fees. Those held by StarkWare shareholders, employees, and independent partner software developers have a lock-in period of four years. After the first year, they will be gradually released.

The team had previously released a decentralization proposal that explained what the tokens would be used for. The Foundation is a non-profit organization that will promote “liveness, censorship-resistance, transparency, and creativity.” The StarkNet Foundation will receive 50.1% of the tokens, which totals 5.01 billion tokens.

StarkNet is a layer 2 solution that uses the zk-rollup to address scalability issues, including high gas fees and low transaction speeds. The company successfully completed a $100 million funding round in May, putting its valuation at $8 billion.

StarkNet has, at times, recorded more weekly transactions than Bitcoin. The STRK token itself was announced earlier this year, and the firm behind it is also working on a layer 3 hyperscaling solution.

Matter Labs raises $200 million in Series C

In other news related to scaling solutions, zkSync creator Matter Labs raised $200 million in a Series C funding round. Blockchain Capital and Dragonfly led this fundraising round. The release of zkSync will also make it compatible with the Ethereum Virtual Machine, which will allow developers to make their apps compatible with the solution.

Investment in layer 2 solutions has been picking up, as evidenced by Matter Labs and StarkNet’s fundraisers. Experts believe that this is critical to decentralization and censorship resistance. However, security will be important, as Vitalik Buterin pointed out.

Gaming-focused scaling solution Boba sees usage decline

Another layer 2 provider, Boba, has also been in the headlines. It is a multi-chain scaling solution that operates on Ethereum, Moonbeam, Avalanche, BNB, and Fantom. It was initially a general blockchain scaling solution but has since changed its focus to blockchain gaming.

However, most metrics show that the network has seen a sharp decline. Upon launch, daily active addresses stood at roughly 2,700. It is now less than 100. TVL also decreased by 62% in the third quarter of 2022.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
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