StarkWare, a company building Ethereum scalability solutions, has revealed the StarkNet token and Foundation. The initiative is aimed at decentralizing the ecosystem and encouraging development.
Ethereum layer 2 scalability solutions company StarkWare has officially confirmed the StarkNet token, a rumored token that will help flesh out the ecosystem. The token will be used to “operate the ecosystem, maintain and secure” Starkware’s ever-growing ecosystem, and promote decentralization.
StarkNet Alpha was first launched in November 2021, with many other teams working on it and expanding the ecosystem. Regarding the changes that the team aims to bring to the ecosystem through the token, StarkWare said,
“Permissionless proof-of-stake leader election mechanism and on-chain payment of transaction fees, both using a native token, will enable the network to operate reliably as an L2 on Ethereum even should StarkWare cease to exist. Decisions regarding the ongoing maintenance of StarkNet will shift from StarkWare to the community. A StarkNet Token and Foundation will be key elements of this effort.”
So far, 10 billion StarkNet tokens have been minted, and they should go live in September 2022. They will be distributed to investors, employees, community developers, contributors, end users, and consultants. 17% of the tokens will be given to investors, 32.9% to core contributors, and the remaining 50.1% will go to the StarkNet Foundation.
The StarkNet Foundation is a non-profit that aims to “maintain the network as a public good.” The Foundation will receive a one-time grant that will be used to encourage the development of bottom-up mechanisms.
StarkWare succeeding as layer 2 solutions kick off
StarkWare has been hitting new milestones as the interest in layer 2 solutions accelerates. The company received $100 million in funding in May 2022, putting its valuation at $8 billion. Layer 2 solutions have become a hot topic, and Vitalik Buterin also said that it was the way for scaling Ethereum.
StarkWare has also revealed a layer 3 scaling solution for Ethereum, called hyper scaling. This scaling is claimed to be able to reduce costs by a factor of 1 million, but it is best suited for specific applications. As for other developments, the Loopring exchange unveiled a cross-layer 2 AMM with StarkWare last year.
The scalability solutions can make a tremendous difference to the feasibility of DeFi, which is often plagued with high gas fees. Lower costs and faster confirmation times can result in a smoother experience and perhaps attract the wider investment world in the space.
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