STRK drops 50% since airdrop: Sell-offs and Sybil attack to blame?

• STRK’s price dropped by over 50%.
• STRK came under attack as the airdrop continued.

The Starknet [STRK] Foundation’s airdrop of 700 million STRK tokens was fully implemented on the 20th of February.

In the initial five minutes, about 5 million tokens were claimed, as reported by the Starknet Foundation.

Notably, during this period, STRK briefly reached a trading value of over $3, marking a roughly 50% increase from the pre-launch futures market price.

This surge increased its fully diluted valuation (FDV) to around $30 billion. 

According to the team’s post on X (formerly Twitter), over 400 million STRK had been claimed as of the current update.

However, the airdrop encountered challenges and did not commence as smoothly as anticipated.

Troubles spotted in the Starknet airdrop

According to a Lookonchain post, an individual received more than 1.4 million Starknet tokens, equivalent to around $3 million, distributed across 1,361 wallets.

Subsequently, all these funds were consolidated into a single wallet address.

In addition to this, another airdrop hunter received 1.22 million STRK, valued at $2.4 million, through 1,800 wallets. This aggregated to a total of $5.4 million. 

The action from these wallets is identified as a Sybil attack, a tactic involving the creation of multiple accounts to simulate numerous individuals simultaneously.

The aftermath of such Sybil attacks has repercussions on the asset’s price, as it grants the attacker the ability to manipulate the asset’s price.

STRK faces sell-offs as price drops

Starknet has experienced a significant surge in trading volume in the last 24 hours, as reported by CoinMarketCap. At the time of this writing, the volume had spiked by over 6,000%, surpassing $1.8 billion.

However, Spot on Chain data reveals substantial sales activity of STRK tokens.

An analysis of the data showed that Nethermind, a Lido node operator, received 10.25 million STRK and subsequently sold over 959,000. The STRK sold amounted to about $2.31 million.

At press time, they held 9.24 million STRK.

Additionally, Flow traders received 5 million STRK and sold 4.543 million across various exchanges, generating nearly $17 million at a selling price of over $3 per token.

At press time, the wallet held around 457,000 STRK.

Source: CoinMarketCap

A price analysis revealed a decline of about 50% from its listing price at the time of this writing.