Did Starknet’s token allocation impact on-chain activities?

• Fifty million unreleased STRK tokens will go to Starknet’s ECMP.
• TVL and volume showed a decline despite development.

Starknet [STRK] recently announced some details regarding its upcoming release of the STRK tokens. The announcement was strategic and has raised curiosity about how it could impact operations on the Layer 2 (L2) network. 

Starknet allocates 50 million STRK

On 30 October, Starknet, in a blog post, announced the allocation of 50 million STRK tokens. The tokens are yet to be released, but this portion has been allocated for its Early Community Member Programme (ECMP).

These tokens were designated for early ecosystem contributors, as outlined in the Foundation’s post. 

Furthermore, 10 billion Starknet tokens have been minted in total. However, they will not be accessible to token holders until April 2024. The majority of these tokens were assigned to the Starknet Foundation. Also, 32.9% has been set aside for core contributors and 17% for investors.

Additionally, the ECMP program is a key component of the strategy for distributing tokens that were allocated to the Foundation. However, Starknet emphasized that this distribution of tokens is not considered an airdrop.

Key metrics yet to be impacted

A close examination of Starknet’s on-chain activities on DefiLlama revealed a lack of significant response to recent developments. The trading volume has been steadily growing. However, there has not been a sudden rise in recent times.

The most recently recorded volume was over $105 million. However, over the last 24 hours, it had dropped to around $10.3 million. It is worth noting that the volume might experience an increase before the trading day concludes.

Source: DefiLlama

Furthermore, Starknet’s Total Value Locked (TVL) has not exhibited a substantial increase in the recent period. The TVL chart indicated a fall, suggesting a lack of substantial liquidity.

However, this trend could reverse when the STRK tokens are released. Also, this could lead to increased network activity and, consequently, an increase in trading volume.

Fair TVL ranking despite token absence 

Considering the current trajectory of the TVL, Starknet has maintained a good position among other Layer 2 (L2) networks. According to data from L2 Beats, at the time of this report, Starknet ranked sixth.

The chart revealed that it also commanded around 1.3% of the market at press time. While this percentage may appear modest, it is still a noteworthy achievement, especially for a network that has not yet launched its token.