Ethereum stands to revolutionize the Internet, yet its high gas fees and low transactions per second pose a challenge both to users and developers. In a larger timeframe, it poses an existential threat to Ethereum’s place as a cornerstone of Web3.
Many projects are aiming to improve the scalability of Ethereum, mainly through the use of layer 2 chains. One of these projects is StarkNet, created by StarkWare.
But what is StarkWare, and how can you participate in the upcoming StarkNet token airdrop?
What is StarkWare?
StarkWare is a company founded in 2018 by the creators of ZK-STARK and founding scientists of Zcash. Its mission is to improve the scalability and privacy of blockchains with its two products: StarkNet and StarkEx.
ZK-STARK is a cryptographic proof technology that allows a party to prove to another party that it has certain information without revealing the actual information. For example, Alice is able to prove undeniably to Bob that she has control over a certain bank account containing enough money to pay for a loan without sharing the actual details of her account or its contents.
This is the technology on which StarkNet is based.
What is StarkNet?
StarkNet is a decentralized ZK-rollup that operates as an Ethereum layer 2 chain. A ZK-rollup is a layer 2 chain that uses zero-knowledge technology to operate, such as ZK-STARK. How does StarkNet work?
All transactions on StarkNet are periodically batched (or rolled up) and given a ZK-STARK proof that is then validated on Ethereum. Essentially, thousands of transactions are sent, verified, and batched off-chain on StarkNet, which saves gas and is far more scalable.
Once the ZK-STARK proof is generated for a batch, Ethereum can validate the proof to make sure the batch of transactions is valid and then proceed to update all wallets included with their new balances.
This process saves Ethereum from having to verify the validity of every single transaction on-chain, which takes a great deal of computing power and leads to high gas fees and a clogged network.
StarkNet Alpha launched in November 2021, which is an experimental and unaudited early version. On July 13, 2022, StarkWare released its plans to decentralize StarkNet further to make it a public good just like Ethereum or the Internet. They included plans for the StarkNet Token, which you can read about further below.
Once StarkNet reaches maturity, it will be an obvious destination on which Web3 apps will build to avoid excessive gas fees while keeping the security of Ethereum. Vitalik Buterin, the creator of Ethereum, stated that ZK-rollups like StarkNet could help Ethereum achieve up to 100,000 transactions per second.
What is StarkEx?
StarkEx works much like StarkNet, but it is centralized and tailored specifically for applications that wish to make use of ZK-STARK technology to provide a smoother and cheaper experience for their users.
Both dYdX and Immutable X use StarkEx, which means transactions sent using these platforms are processed and batched off-chain by StarkEx and then validated on-chain, exactly like StarkNet.
Since its launch in June 2020, StarkEx has at the time of writing $696 million in total value locked, $635 billion in cumulative trading, and 60.5 million NFTs minted.
StarkEx is not meant as a public good, but rather as a service for applications and projects. StarkNet is StarkWare’s next step in bringing ZK-STARK technology to the public through an open layer 2 chain usable by anyone.
StarkNet Token, and how to participate in the airdrop
On July 13, 2022, StarkWare announced the native, ERC-20 StarkNet Token, slated for release in September 2022. The initial supply will be 10 billion, with the potential for the protocol to mint more as decided by the community in the future. The initial allocation will be:
The tokens allocated to core contributors and investors are subject to a one-year cliff and a four-year linear release.
According to StarkWare, the token will have three uses:
1. Governance
2. Payment of transaction fees on StarkNet
3. Staking to participate in StarkNet’s consensus mechanism
And the StarkNet airdrop? Nine percent of the initial StarkNet Token allocation goes to “community provisions”, which includes those who have performed work for StarkNet or StarkEx and also general StarkEx users prior to June 1, 2022.
This could include users of dYdX, Immutable X, and other StarkEx-based platforms. No exact specifics have been announced yet, but if you interacted with those applications prior to June 1st, you may be eligible for the airdrop once the token is released.
Airdrops like this help incentivise people to interact with new DeFi protocols and learn about the future of finance, just be careful only to use small amounts of money / tokens!
To try out StarkEx or the StarkNet Alpha for yourself, check out this Twitter thread that lays out the steps.
How to buy Ethereum
You can buy Ethereum (ETH) and other cryptocurrencies in Exodus, in any way you prefer:
- Use a credit / debit card, bank account, or Apple Pay. The easiest payment gateway, Ramp or MoonPay, is chosen for you depending on your region and availability.
- Exchange Bitcoin and 200 other cryptocurrencies for Ethereum (ETH) using the built-in exchange app
- Link your Exodus wallet with the FTX exchange for even more options
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.
