The CEO of StarkWare, the once-$8 billion Israeli firm behind Ethereum-based blockchain Starknet, introduced layoffs and a full company restructuring in the present day. Month-to-month income on its flagship community has collapsed greater than 98% from its peak.
In November 2023, Starknet’s on-chain income peaked close to $5.8 million inside a single month. This month, it’s on observe for about $100,000.
In different phrases, the community that after generated $187,000 in day by day charges now generates about $3,500 per day. StarkWare declined to reveal the variety of layoffs.
StarkWare, based in Israel in 2018, develops Starknet, an Ethereum layer 2. For disambiguation, there is no such thing as a StarkWave entity, a standard misnomer that circulates on-line.
Starknet’s STRK token launched by way of airdrop in February 2024 and briefly traded to $4.41. It’s since fallen to $0.033, giving it a market capitalization of $187 million. That’s a 91% decline from its $2 billion market cap in March 2024.
Value of Starknet, February 2024-present. Supply: TradingView
StarkWare CEO: We’re downsizing
CEO Eli Ben-Sasson posted his inner memo to X, telling employees the corporate had grown too giant.
“Very sadly, as part of this process, we are downsizing,” he mentioned as he fired employees. “Our new strategy requires that we move fast, and we’re too big and too inefficient for that.”
StarkWare raised $100 million at an $8 billion valuation in Might 2022, quadrupling its measurement from $2 billion in a spherical six months prior. Though the corporate hasn’t up to date its valuation in in the present day’s downsizing announcement, it will most likely be embarrassing relative to these 2022 figures.
GreenOaks Capital and Coatue had been lead buyers within the firm. Earlier backers included Sequoia Capital, Paradigm, Founders Fund, in addition to crypto dumpster fires Three Arrows Capital and Sam Bankman-Fried’s Alameda Analysis.
StarkWare raised greater than $260 million over its lifetime — greater than the present market cap of STRK.
COO Oren Katz has submitted his resignation and departs on the finish of this month.
A cut up and a sundown
The restructuring splits StarkWare into two impartial enterprise models. An purposes division, led by Chief Product Officer Avihu Levy, will chase income straight. A Starknet growth unit, led by Product Head Tom Model, will proceed core protocol work.
The income decline is generally as a consequence of Starknet’s failure to draw utilization of its blockchain in addition to restricted income throughout layer 2 blockchains.
Ethereum’s Dencun improve in March 2024 slashed knowledge prices for all layer 2 networks, compressing charge income throughout the board. Layer 2 governance tokens like STRK posted common returns of destructive 40% in 2025 of their second consecutive unprofitable 12 months.
Starknet fared worse than most. Its whole worth locked sits round $241 million per DefiLlama, far behind Coinbase’s Base at roughly $4.3 billion and Arbitrum at $1.9 billion. Starknet’s all-time cumulative charges whole simply $45 million.
Ben-Sasson acknowledged as a lot. “Infrastructure alone does not win the game.”
