Why is Starknet (STRK) Losing Value?
With Nethermind’s intervention towards airdrop hunters and whales, Starknet’s STRK coin lost value rapidly. After its launch on February 20, the coin’s value dropped more than 50%.
In the last two days, the price of the Ethereum-based Layer-2 network Starknet’s token fell severely. The main reason for this fall was the sale of millions of dollars worth of tokens by Ethereum infrastructure company Nethermind and airdrop farmers.
According to CoinGecko data, Starknet’s (STRK) price had a drop close to 60% and fell below $1.90 from the highest level of $4.41 seen on February 20.
STRK rose to $7.70 shortly after listing on Binance, but it fell below $1.90 experiencing a 75.4% drop since then. This situation caused significant fluctuation in the market and created concern among investors.
Blockchain analysts called Lookonchain, in a report published on February 22, stated “$STRK’s price has been in a constant downturn since its launch.”
According to the company’s research, it was determined that Nethermind sold 3.41 million STRK worth over $6.7 million. However, the firm warned that “sales may continue” because they still have tokens worth $12 million.
These developments have created concern and uncertainty among investors. Lookonchain’s analyses are considered an important source for understanding market volatility and future performance of the token.
A few hours ago, Lookonchain detected a second example of STRK airdrop hunters combining their wallets and announced in this example approximately 1.2 million STRK worth $2.4 million from roughly 1,800 different wallets moved to a single address.
On February 21, Lookonchain announced another example of an airdrop hunter where 1.4 million STRK worth $3 million from approximately 1,400 different wallets were moved to a single address.
This situation increases concerns that airdrop hunters are accumulating large amounts of STRK and merging them into a single address. Lookonchain’s such analyzes are considered an important source in the crypto community and helps investors to understand future performance of the token.
Another airdrop hunter also received 1.22M $STRK($2.4M) via ~1.8K wallets. pic.twitter.com/Xzh80FF5lH
— Lookonchain (@lookonchain) February 21, 2024
Developed by Banteg from Yearn.finance;
“More than 700,000 of the 1.3 million wallets suitable for the airdrop before Starknet’s airdrop are linked to GitHub accounts controlled by airdrop hunters.” However, the STRK airdrop faced some glitches due to Starknet users claiming that they were not eligible for distributions. The eligibility criteria requiring users to own at least 0.005 Ethereum on the network made the operation difficult.
When the airdrop was launched, a massive buying wave occurred and 45 million STRK tokens were secured in the first hour and a half after allocations started. Some other users, however, objected to the plan to reward STRK’s Starknet investors and contributors. The plan envisioned rewarding with 1.3 billion STRK, constituting about 13% of the supply, two months after the launch.
According to Voyager’s data, so far about 430 million STRK coins have been claimed by eligible individuals. It is estimated to be over $790 million, which corresponds to approximately 92% of the total value of the distribution. Even though STRK’s price has fallen, Starknet’s locked total value reached $73.5 million.
According to DefiLlama, there was almost a 30% increase in the last 24 hours. This situation shows that Starknet still attracts strong interest and its community continues to grow.
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