Starknet is yet another example of VC's dumping on retail investors; joining the ranks of EigenLayer, and Wormhole.
The price is down 72% since it's all time high which was at the token launch itself with a fully diluted market cap of $44B ($6.8B in circulation). On April 15th, investors and early contributors had their first unlock, between April 1st, and April 20, the price went from $2.16 down to $1.22, the next big unlock is happening today on May 12.
Overall, from this data I cannot conclude that VC's and the Core Team dumped on the community with definitive proofs unless they sniped the token at launch, but what I can conclude is that starting off with a massive FDV is not a good idea, even with great tech, the toxicity resulting from people losing more than half of their capital within less than 3 months is something that is very hard to recover from.
Was the airdrop the reason for such a failure? https://cointelegraph.com/news/starknet-airdrop-largely-successful-despite-controversies, it would appear this was the main factor contributing to selling pressure. However, why would the team not see this coming? They raised $282M from VC's prior to the listing, they should have kept a large portion of that treasury to prevent a price collapse from the selling pressure of the airdrop.
VC's involved on this raise are:
- Pantera Capital
- Paradigm
- Sequoia Capital
- Coinbase Ventures
- Polychain Capital
- Multicoin Capital
- ConsenSys
- Vitalik Buterin
- Greenoaks Capital
- IOSG Ventures
- Tiger Global Management
- Founders Fund
- Naval Ravikant
- Scalar Capital
- Elad Gil
- DCVC
- Wing Venture Capital
- Bossanova Investimentos
- Semantic Ventures
- Collaborative Fund
- Floodgate
- Metastable Capital
- Intel Capital
- Atomico
- Bollinger Investment Group
- Coatue Management
- Alameda Research
- Three Arrows Capital
- Fred Ehrsam
- Linda Xie
The investors that put their money during the seed round, Vitalik was part of that round but Pantera was the lead, and Polychain was also part. Polychain was also involved in the EigenLayer fiasco. Meanwhile Multicoin was also involved on the Wormhole disappointment. Overall, the Seed round was for an undisclosed valuation, but I would say probably around $40M which was a 1000X return from the $44B at launch, even after 72% decrease, it still is a 300X return.
Regardless, for me I have decided to avoid all web3 projects that are heavily funded by VC's prior to retail users having a chance to secure an allocation.
We are in a bull market, and this project is underperforming in terms of price action, can you imagine what will happen in a bear market??? I would avoid buying their token at all cost. Show Less
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