Starknet, a Layer-2 solution built on Ethereum using zk-rollups, experienced an impressive surge in growth throughout 2023. By the end of the year, it had attracted a large number of users and developers eager to leverage its promising technology and potential token launch. This momentum reached a peak in early 2024, when daily active users on Starknet surpassed 100,000, with some dApps seeing significant traffic due to speculation around an airdrop. This speculative frenzy, particularly around tokens like JediSwap, drove usage to its height, with daily fee revenues at times exceeding $200,000. For a brief moment, Starknet was one of the top Layer-2 networks in terms of transaction volume and fees, positioning itself as a major player in the space.
However, this surge proved to be unsustainable. The highly anticipated airdrop of the STRK token, which took place on February 20, 2024, marked the beginning of Starknet’s steep decline. While the airdrop distributed 10% of the total token supply to more than 1.3 million addresses, what followed was a sharp drop in both user engagement and on-chain activity. Prior to the airdrop, daily active users had soared to more than 380,000, but within a week after the token distribution, these numbers plummeted by over 80%, dipping below 50,000 active users. By April 2024, the network was struggling with just around 20,000 daily active users—a stark contrast to its earlier success.
Several factors contributed to this sudden collapse. The primary driver was the exit of “airdrop farmers”—users who participated solely to qualify for the token distribution and had no long-term interest in Starknet’s ecosystem. These participants, along with Sybil addresses, flooded the network before the airdrop but quickly abandoned it after claiming their rewards. This caused a sharp drop in daily active addresses, which were further exacerbated by changes in the airdrop eligibility rules, causing many to disqualify themselves just before the snapshot.
The drop in user numbers was accompanied by a severe decline in activity across the network. Starknet’s decentralized apps (dApps), including decentralized exchanges (DEXs), bridges, and NFT platforms, saw a significant decrease in usage. Liquidity and trade volume dried up, and the once-bustling ecosystem became a ghost town. Starknet’s community incentives, such as the “DeFi Spring” program, which allocated 40 million STRK tokens to liquidity mining, were insufficient to maintain momentum. By mid-2024, the network was struggling with fewer than 100,000 daily transactions—a stark contrast to the peak numbers achieved during the airdrop.
As the network’s activity faltered, Starknet’s fee revenue also experienced a dramatic decline. The fees had reached impressive levels in the lead-up to the airdrop, but by April 2024, they had fallen to just $3,000 per day. This downward trend continued throughout the year, with late 2024 and early 2025 showing only brief and minor spikes in revenue due to a combination of upgrades and token staking initiatives. By the start of 2025, daily fees were down to a meager few hundred dollars, signaling a near-total collapse in on-chain activity. Even though some of this was due to Ethereum’s Dencun upgrade reducing Layer-2 costs and Starknet’s own fee adjustments, the primary reason for the decline was simply a lack of ongoing user engagement.
The post-airdrop downfall can be attributed to several key factors, including the issue of “artificial” activity. In the run-up to the airdrop, much of Starknet’s transaction volume was driven by users engaged in Sybil-like behavior—creating multiple wallets to game the system for token rewards. While Starknet’s foundation had attempted to filter out these users, many still slipped through. Once the airdrop was completed, these opportunistic participants had little reason to continue using the network, and they quickly moved on to the next opportunity. As a result, Starknet’s community was left with a small, disengaged base of genuine users, who were often dissatisfied with the airdrop process and its perceived unfairness.
Additionally, many DeFi protocols that had initially thrived by incentivizing user activity through the promise of the airdrop soon faced sharp declines in their total value locked (TVL) and transaction volume. Liquidity providers who had once earned high yields found that their investments were no longer generating returns, as user activity dwindled. Starknet’s DeFi incentives, including the “DeFi Spring” program, couldn’t provide the necessary boost to sustain long-term growth. Protocols that had once hoped to leverage the airdrop to attract new users were left struggling to stay relevant in the face of declining sentiment.
The downturn also hit Starknet’s developers, who began to question whether building on the network was worth the effort. With fewer users and less potential for revenue, the opportunity cost of deploying on Starknet became too high, especially when compared to more active Layer-2 solutions. As the network’s activity continued to falter, developers shifted their focus to more stable ecosystems, further exacerbating the challenges Starknet faced.
In conclusion, while Starknet’s early rise seemed to promise a bright future, its post-airdrop collapse reveals several critical lessons about the volatility of blockchain ecosystems driven by speculative activity. The stark contrast between its peak and subsequent decline highlights the importance of sustainable, organic growth over short-term gains fueled by airdrops and speculative behavior. As Starknet looks to rebuild, its future will depend on attracting a loyal user base, maintaining active engagement, and fostering long-term development in a space that is quickly evolving.
