Reflections on Starknet’s Airdrop by the Founder

Now that the first phase of Starknet’s airdrop activity (Provisions) has ended, I want to share some of my personal thoughts. The following content does not constitute investment advice and does not necessarily reflect the positions of StarkWare or the Starknet Foundation. DYOR.

What is Starknet? Why STRK?

Starknet is a ZK-Rollup network. We launched Starknet in Alpha mode in November 2021, aiming to scale Ethereum using the STARKs cryptographic protocol without compromising Ethereum’s core principles such as decentralization, transparency, inclusivity, and security.

The STRK token empowers those who wish to contribute to the ecosystem with roles in governing, operating, and securing the Starknet network. STRK has three main use cases: governance, paying gas fees on Starknet, and participating in Starknet’s consensus mechanism.

The Starknet Foundation is distributing STRK to valuable community members who have demonstrated a desire to advance, maintain, and secure Starknet through various activities such as Devonomics, Catalyst, DeFi Spring, and the focus of this article, Provisions (the airdrop).

On February 14, 2024, the Starknet Foundation announced the first round of Provisions, with plans to distribute up to 700 million STRK tokens, from the 900 million reserved for the Provisions event. The claim period lasted four months, from February 20 to June 20, 2024, with about 500 million tokens claimed. Approximately 400 million STRK tokens remain for future airdrop rounds.

What Are the Goals of Provisions?

The primary goal of Provisions is to distribute STRK tokens to a broad range of real users who will be active on Starknet and contribute to its security and governance, thus advancing Starknet’s decentralization. Starknet is both a technology and a social tool, enabling individuals and societies to implement various social functions such as currency, assets, and governance on it. Therefore, Starknet’s security is directly related to the number and resilience of those who care about it.

One major challenge Provisions faced was that “blockchains do not represent real humans.” By this, I mean that the basic unit on-chain is the account address, not the human/user, and there is no clear correspondence between them—one person may control multiple addresses.

Based on existing on-chain information, it is difficult to determine which accounts represent humans/users more likely to contribute to Starknet’s future operations, security, and governance. In other words, our challenge was how to reasonably allocate STRK to humans/users whose missions align with Starknet’s long-term goals based on on-chain and other data about accounts and their activities.

Firstly, it’s important to acknowledge that existing data is insufficient to precisely solve this problem. Everyone involved in the design of Provisions realized early on that all potential calculation methods would only yield relative results and could not precisely achieve all goals—some users perfectly aligned with Starknet’s mission might receive only a small number of tokens or none at all, while others less aligned might receive a large number of tokens.

Given the public criticism faced by Starknet Provisions and the subsequent criticism of airdrops by Eigenlayer, ZKsync, and LayerZero, I think it’s necessary to clarify this point. As far as I know, no existing solution can achieve the aforementioned goals more accurately or fairly than we did. The allocation plan may not be perfect, but adopting other metrics would also lead to inaccuracies in different scenarios.

How Did the Starknet Foundation Design the Airdrop?

The Starknet Foundation included six groups in the airdrop, with allocation within each group based on metrics/data relevant to that group:

1. Starknet Users: Mainly considered address activity metrics and commissioned a third party to conduct Sybil screening.
2. Early Adopters of STARK: Allocated based on users’ use of StarkEx before Starknet.
3. Ethereum Contributors: Mainly included individuals who contributed to Ethereum in various ways (staking, development, submitting Ethereum Improvement Proposals, etc.), with specific metrics for each subcategory.
4. Github Developers: Allocated to developers of selected open-source code projects on Github based on Github activity metrics.
5. Early Community Member Program (ECMP): Individuals who contributed to the Starknet ecosystem through activities such as hosting events and promoting community development could apply for tokens. An ecosystem member committee decided allocations based on review results.
6. Developer Partners (DP): Infrastructure developers with prior agreements with the Starknet Foundation also received token allocations based on pre-agreed terms.

Overall, the fundamental idea of Starknet is to distribute STRK to a diverse range of groups based on their past actions and contributions, whom Starknet believes are well-suited to operate, care for, and protect Starknet’s future.

Did Provisions Achieve Its Goals?

As mentioned earlier, we knew from the start that STRK allocation could not be entirely accurate due to measurement limitations. This raises the following questions: Did we do our best with the data available? How do we evaluate the allocation results—how closely do the addresses included in the airdrop correspond to real humans/users?

Among the six groups, the last three can be identified as corresponding to real humans one-to-one, and we can further speculate that these individuals are likely to continue caring about Starknet’s future.

For the third group (Ethereum Contributors), except for the staking subgroup, most subgroups included in the airdrop probably meet the “one address to one human/user” standard, and their past actions have shown their willingness to care about decentralization, so we can hope they will also care for and help Starknet.

The second group (StarkEx Users) as early adopters of STARK technology had the smallest claim rate and airdrop size (only 2.4 million STRK claimed, less than 1% of the total allocation), thus negligible.

The hardest to evaluate is the allocation result for Starknet Users, who received over 87% of the airdrop (more than 430 million STRK). Public dissatisfaction after Provisions mainly focused on this group’s allocation.

There has been much discussion on social media about this, mostly negative, with many mentioning the balance threshold issue—Starknet required holding at least 0.005 ETH on a specific date. There were also other controversial events, such as a StarkWare executive’s inflammatory remarks that angered the community, followed by a quick apology; and criticisms of the unlocking plan for StarkWare shareholders (including investors, founders, and employees), which led to a revised unlocking plan.

Criticism of the “0.005 ETH threshold” and “electronic beggars” persisted for a long time, although recent new airdrop controversies have significantly reduced these criticisms, they have not entirely disappeared.

How should we view this community anger? To what extent does it come from professional farming teams trying to influence the current and future (not limited to Starknet) airdrop standards? To what extent does it represent a particular group (farmer or non-farmer)? If different allocation methods were adopted, would they contribute to Starknet’s long-term success? These are research questions I hope to see answered. If you have ideas on how to address this issue, please share your suggestions on the Starknet community forum and @ me.

So far, I’ve discussed the social media sentiment related to Starknet User allocation; now it’s time to consider a larger question. Did Starknet do well with the airdrop? The answer is I don’t know because we lack the metrics needed to answer this question, which is the same problem we faced initially with the token allocation. On-chain metrics such as TPS, TVL, number of addresses, and token price do not directly answer the question—”Are STRK holders a broad and diverse group? Will they stay to improve, operate, and protect Starknet?”

I also want to find the answer to this question. If you have thoughts on how to address this issue, please share your views on the Starknet community forum and @ me.

How Do I Feel Personally?

This question might sound strange, but I believe many people want to hear the answer. The entire team endured enormous mental pressure during the Provisions work, especially Abdel and I, who were primary targets of personal attacks.

To cope with the Twitter feed full of misinformation (and worse), we relied not only on mutual support within the Starknet Foundation or StarkWare teams but also on the unwavering support of Starknet’s amazing ecosystem. Although this period was hard to endure, it ultimately proved valuable, highlighting areas needing improvement and testing our team’s resilience.

We learned the importance of firm decision-making while being open to constructive feedback, even if harsh. This experience reinforced our belief that in the crypto space, handling public pressure is as crucial as technical decisions. Seeing people from other ecosystems (sometimes even our competitors) reach out and offer support was incredibly encouraging, and I will never forget this help. Most importantly, we drew strength from Starknet’s amazing ecosystem.

How to Do Better in the Future?

With approximately 400 million STRK still available for future airdrop rounds, how can we do better?

Clearly, “proof of identity” on the blockchain is a challenging problem to solve, and we can’t be sure if it can be solved, but this is precisely the direction we are keen to pursue.

Professional airdrop farming teams remain highly motivated to influence subsequent airdrop rounds, meaning whatever we do will attract public protest on social media. To me, this is an unavoidable and unpleasant aspect of the crypto industry.

I hope the Starknet Foundation and its Provisions-related teams can find new ways to distribute tokens to a diverse group of people who care about Starknet’s long-term vision and mission and are willing to stay and help it grow. I know this is their desire, and they are researching and discussing how to achieve this goal.

In summary, Provisions aims to put STRK into the “right hands.” Honestly, I don’t know if the Starknet Foundation’s design (especially the allocation for Starknet Users) was accurate enough; I hope future community research can answer this question. I will continue to ponder this issue and plan to share my suggestions at some point in the future.

I am eager to hear more thoughts on token distribution mechanisms from people inside and outside the ecosystem. If you have any, please voice them on the Starknet community forum.