Starknet, a prominent Ethereum layer 2 platform, has been experiencing a significant departure of users just before a substantial token airdrop. Within a week leading up to February 20, 2024, Starknet’s active user count has plummeted, nearly returning to long-term lows.

Starknet Airdrop Eligibility Changes

The decline in active users coincides with the platform’s preparation to distribute a significant airdrop. The airdrop, originally planned for February 20, aims to distribute over 700 million STRK tokens, representing approximately 10% of the total token supply. However, last-minute changes have sparked discontent and controversy among the user base.

What is an Airdrop?

An airdrop is a distribution of free tokens or cryptocurrencies to the addresses of holders of a particular cryptocurrency or blockchain network. Airdrops are often used to promote new cryptocurrencies or blockchain projects.

The initial eligibility criteria for the STRK token airdrop included modifications for over 900 ETH home validators and the distribution of over 6.9 million STRK to 1,000 solo stakers who were initially misclassified. Additionally, over 1 million STRK were set aside for potential future community allocation after addressing concerns with individuals accumulating GitHub handles for squatting purposes.

These changes have not been universally accepted, with the crypto community criticizing Starknet’s eligibility requirements and the company’s handling of token unlocks. Starknet has acknowledged the discontent, stating that it has received feedback from dedicated community members and network users who have been excluded due to specific criteria.

The company has emphasized its commitment to finding a “meaningful resolution” but has also noted that the process requires time for research, design, and testing.

User Exodus and TVL Paradox

Crypto commentator Banteg observed that nearly 2,000 participants eligible for the airdrop had modified or removed their accounts after the eligibility snapshot was taken. This revelation raised questions about potential squatting and gaming of the system, further complicating the eligibility debate.

Starknet data platform Starkscan reported a 90% drop in active users within just the past week. On February 13, the platform saw a surge to 225,000 active users, but the number has since decreased to approximately 25,000 at the time of writing.

Total Value Locked (TVL)

Total value locked (TVL) is the total value of all crypto assets deposited into DeFi protocols. It is a measure of the amount of capital invested in DeFi and can be used to assess the popularity and liquidity of different DeFi protocols.

Despite the challenges, the platform’s total value locked (TVL) remains close to its all-time highs, currently around $185 million. This highlights the paradoxical nature of Starknet’s current situation, with users expressing frustration while the platform’s financial value remains strong.

Unpredictable Nature of Crypto Airdrops

As Starknet prepares for its public launch, the unfolding events serve as a reminder of the often volatile and unpredictable nature of crypto airdrops. While airdrops can provide opportunities for users to acquire free tokens, they can also be accompanied by controversy and disappointment.