Economy

What Is Starknet (STRK) & Is It A Good Investment?

Published

5 months ago

24/07/2025

High fees and slow transaction times on crypto networks like Ethereum and Bitcoin have long hindered blockchain’s mainstream adoption.

Starknet, a Layer 2 (L2) scaling solution, emerges as a promising answer to this challenge, leveraging advanced zero-knowledge rollup (ZK-rollup) technology to offer faster, cheaper transactions without sacrificing security.

Keep reading to learn what Starknet is, how it works, and whether its native token, STRK, represents a sound investment opportunity.

TL;DR

Starknet is a ZK-Rollup Layer 2 solution built for Ethereum, enabling faster and cheaper transactions, that is also evolving into an execution layer for Bitcoin.
STRK is the native token used for governance and paying transaction fees.
Starknet’s scalability and developer-friendly tools make it a strong contender in the L2 ecosystem.

What Is Starknet?

Starknet is a permissionless, decentralized Validity Rollup (ZK-Rollup) Layer 2 network. It scales Ethereum by moving computation off-chain while maintaining security via STARK (Scalable, Transparent ARgument of Knowledge) proofs, and has recently also emerged as an execution layer for Bitcoin.

Instead of processing each transaction on the main chain, Starknet bundles thousands into a single, verifiable proof. This proof is then submitted to the main chain for efficient verification, significantly reducing network load, increasing throughput, and lowering transaction fees.

Starknet was developed by StarkWare Industries, a leader in cryptographic research. It uses its own Turing-complete programming language, Cairo, designed for high efficiency in ZK-proof generation, making it a powerful tool for developers building scalable dApps.

Key Features of Starknet

Now, let’s look at some distinct features that make Starknet stand out as a Layer 2 network.

Native account abstraction: Accounts on Starknet are smart contracts, allowing programmable logic such as multisig, session keys, and custom nonce management.
SHARP/SNOS proof architecture: Blocks are executed off‑chain, generating proofs that compress state transitions to be verified on Ethereum, ensuring trust without on‑chain re‑execution.
StarkGate bridge: Facilitates bridging between Ethereum (and now also Bitcoin) and Starknet
Cairo programming language: Cairo’s design prioritizes efficient STARK proof generation, making it crucial to Starknet’s scaling solution.
Decentralized & permissionless: Anyone can deploy dApps, and validators ensure network security.

What Is the STRK Token?

The STRK token is the lifeblood of the Starknet ecosystem, serving several critical functions:

Transaction fees: Users can pay for transactions on the Starknet network using STRK.
Governance: STRK holders can participate in the governance of the network, voting on proposals that will shape its future development.
Staking (soon): As the network becomes more decentralized, STRK will be used for staking, allowing token holders to participate in the consensus mechanism and earn rewards for securing the network.

Token Distribution and Supply

The initial distribution of the STRK token was one of the most anticipated airdrops in crypto history, with a significant portion of the supply allocated to early users, developers, and other contributors to the ecosystem.

The token has a fixed maximum supply of 10 billion STRK, with portions allocated to various stakeholders including the Starknet Foundation, early contributors, investors, and community incentives. Token allocation is as follows:

Recipient	Percentage	Purpose
Community & Grants	50.1%	Reward developers, users, and contributors
Core Contributors	32.9%	Compensate StarkWare team and early developers
Investors	17%	Support from early backers and strategic partners

The tokens are released gradually over several years to prevent sudden market inflation. This model is designed to incentivize long-term ecosystem development while progressively decentralizing control to the community.

Since its launch in February 2024, the price of STRK has seen significant volatility. Its value, like other cryptocurrencies, is driven by market demand and the network’s growth.

good investment

Source: Coingecko

Today, traders on various exchanges can acquire the token through different trading pairs, and many platforms even allow you to buy STRK with BTC.

Users looking to cash out STRK typically do so by transferring it to major cryptocurrency exchanges that support the token and then converting it to other cryptocurrencies or fiat currencies.

Is STRK A Good Investment?

STRK

Image source: Starknet

Evaluating STRK requires an analysis of its technology, ecosystem, and market position.

Technological Strength

STARK proofs offer post-quantum security and scalability advantages without trusted setups. Starknet’s native account abstraction supports user-focused innovations like automated wallet recovery and batched transactions, boosting usability.

Ecosystem Growth

Starknet is cultivating a diverse ecosystem, spanning DeFi, NFTs, and gaming. Developer grants, hackathons, and toolkits encourage adoption and dApp innovation.

A growing developer base and increased app deployment can amplify network value.

Competitive Landscape

Starknet competes with other L2s like Arbitrum, Optimism, zkSync, and Polygon zkEVM. Its success depends on consistent technical progress, user acquisition, and developer traction.

Market sentiment and macroeconomic factors will also influence STRK’s price performance.

Token Utility

STRK’s role in governance, staking, and (optionally) fees ties its value to network activity. Higher adoption could increase demand for STRK, enhancing its utility. Still, potential investors should review distribution timelines and circulating supply data before entering.

Potential Risks & Considerations Before Investing In STRK

Despite the promising indicators, investing in STRK also poses some significant risks and challenges, which we expound below:

Market competition: Starknet is one of many L2 solutions. Sustained innovation is required to maintain relevance.
Developer onboarding: Cairo’s unfamiliarity may deter some Ethereum developers despite its advantages.
Token distribution concerns: Early allocations and vesting schedules could affect supply dynamics.
Volatility: STRK, like most altcoins, is susceptible to rapid price fluctuations driven by broader crypto market sentiment.

Final Verdict: Should You Invest in STRK?

Starknet stands out for its technical approach and developer-first design. With STARK proofs and native account abstraction, it offers compelling solutions to Ethereum’s scalability issues, and its making headways in the Bitcoin L2 ecosystem too.

That said, investing in STRK involves risk.

While its long-term prospects look potentially promising, real-world adoption and network maturity will determine its sustainability. Investors should assess their risk tolerance and stay informed as the ecosystem evolves.

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Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Nigerian Stocks Close 1.13% Higher to Remain in Bulls’ Territory

Published

1 day ago

20/12/2025

Dipo Olowookere

By Dipo Olowookere

The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.

Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.

Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.

But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.

Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.

As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.

A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.

Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.

Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.

Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.

Economy

FrieslandCampina, Two Others Erase N26bn from NASD OTC Bourse

Published

1 day ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.

The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.

FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.

On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.

During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.

The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Naira Crashes to N1,464/$1 at Official Market, N1,485/$1 at Black Market

Published

1 day ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.

In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.

In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.

In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.

The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.

President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.

The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.

President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.

Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.

Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.