While the broader cryptocurrency market is experiencing a downturn, Starknet’s STRK token is surging, posting a gain of over 20% today. This impressive performance comes less than three weeks before a scheduled unlock of tokens for investors and team members.

The recent price action marks a significant turnaround for the token. Since its Token Generation Event (TGE) in February 2024, where it opened around $2, STRK has struggled. Despite its recent rally, the token currently trades at approximately $0.17 with a market capitalization of $770 million.

Resilience Amid Increasing Supply

The token’s strength is particularly notable given its token economics. Since April, 127 million STRK tokens, valued at roughly $21.5 million, have been entering circulation each month. Despite this consistent increase in supply, the token has managed to climb 16% since April 1, demonstrating strong buying pressure that is currently absorbing the new liquidity.

STRK’s performance coincides with a broader outperformance by privacy-focused tokens like Zcash (ZEC) and Monero (XMR). This may be influenced by the reputation of Starknet’s co-founder, Eli Ben-Sasson, who was notably involved in the launch of ZEC.

Ecosystem Growth Fuels Momentum

The positive price action is supported by strengthening on-chain metrics for the Ethereum Layer 2 network. Starknet recently announced it had reached a new staking milestone, with 900 million STRK—worth over $150 million—now staked. This accounts for approximately 20% of the token’s circulating supply.

Furthermore, the network’s Total Value Locked (TVL) has rebounded significantly in the fourth quarter. According to data from L2Beat, Starknet is the sixth-largest Layer 2 by value secured, and its TVL has increased by 200% since its low point in July.

A primary driver of this growth is the perpetual futures decentralized exchange (DEX) named Extended, which now accounts for just over 40% of Starknet’s entire TVL. Extended’s own TVL nearly doubled in October alone, growing from $55 million to $96 million, likely spurred by the ongoing trend of airdrop farming on perpetual DEX platforms that began in September.