How StarkNet Describes Itself

Starknet is a Validity-Rollup (ZK-Rollup) Layer 2 solution operating on the Ethereum blockchain, designed to enhance scalability and privacy through advanced cryptographic techniques known as Zero-Knowledge Scalable Transparent Arguments of Knowledge (ZK-STARKs). Developed by StarkWare Industries, StarkNet aims to significantly reduce gas costs and increase transaction throughput without compromising security.

Key Features and Objectives:

• Scalability: StarkNet leverages ZK-STARKs to batch hundreds of transactions off-chain and submit a single proof on-chain, greatly enhancing Ethereum's scalability.
• Privacy: Utilizes zero-knowledge proofs to ensure transaction privacy while maintaining the integrity and security of the network.
• Developer-Friendly: Offers a full-stack scalability solution with Cairo, a Rust-inspired, Turing-complete language specifically designed for writing STARK-based applications.

The network’s native token, STRK, is designed as a governance token, and will allow holders to vote on issues and proposals within the Starknet ecosystem. 

Starknet was developed by StarkWare Industries, originally founded in 2018 by Eli Ben-Sasson, Uri Kolodny, Michael Riabzev, and Alessandro Chiesa. Its official launch as a layer 2 network took place in February 2022. 

Starknet plans to distribute 1.8 billion STRK to users and community members, beginning with its first airdrop phase, which will see the distribution of over 700 million tokens between February 20 and June 20. 

Risks of STRK

Like an investment in other crypto assets, there are some general risks to investing in STRK. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in STRK is subject to the following specific risks:

• As a layer-2 roll-up solution, any potential success associated with STRK is reliant on the continued security, decentralization, as well as adoption of the Ethereum chain. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with STRK . Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The STRK community and StarkWare Industries are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of STRK have no recourse to the STRK community, StarkWare Industries, or Uphold if STRK declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing STRK on the Uphold Platform, Uphold performed due diligence on STRK and determined that STRK is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of STRK, including ensuring the source code being open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of STRK.
• Marketing materials put forward by the STRK social team including, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with STRK, including any code defects, security breaches and other threats concerning STRK and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with STRK, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of STRK. 

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific To Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please also review the Uphold Canada – Crypto Risk Statement for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and Risks Specific To Holding Digital Assets statement. 

Last updated on February 19, 2024.