The central theses
- Step Finance’s STEP token was released on Solana this weekend. It initially traded at $ 0.05 before reaching $ 9.50.
- Some project supporters have argued that the launch was unfair after the price jumped above $ 0.05 immediately.
- The rise of STEP comes with the rapid growth of the Solana ecosystem.
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Step Finance’s STEP token rose nearly 200 times when it was released over the weekend, but some followers have complained that the launch was unfair.
STEP Launch proves that it is divisive
Step Finance, a popular project in the Solana ecosystem, caused a stir after launching its native token on Saturday.
STEP originally had a price of $ 0.05 but started trading as high as $ 9.50 on Sunday evening. Within 12 hours, Step Finance had attracted around $ 64 million in liquidity.
Even in DeFi terms, the almost 200-fold increase in a few hours is breathtaking. Step Finance is a brand new project too: it recently launched after a Solana hackathon and its app is currently in alpha mode. After the token start, 4 million of a maximum of 1 billion STEP tokens are currently in circulation– only 0.4% of the total offer.
They are trading at $ 6.82 today, which is a fully diluted valuation (FDV) of Step Finance of $ 6.8 billion.
Step Finance acts as the “front page” for Solana. It provides an interface that allows users to view their transactions and activity in one place, similar to Ethereum apps like Zapper and Zerion.
STEP traded above $ 1 within seconds of launch, leading some to criticize how Step Finance got off to a start. Several followers of the project shared their complaints on a Twitter post that Step Finance shared on Saturday.
A user who posted under the pseudonym CryptoWaifuu said it was “not the best and most transparent start”. Another named AChuieb commented that this was the “worst start” they had ever seen. Many of the comments suggested that bots had infiltrated the sale to get the tokens when released at $ 0.05.
George Harrap, co-founder of Step Finance, defended the launch process in a statement to Crypto Briefing. He said:
“At STEP, all capital is treated equally. We don’t care if one address with 1 USDC is different from another with 1 USDC. Limiting these addresses in search of “fairness” is literally the opposite of the definition of the word “fair”. There were 26,000 participants at the start, these individual addresses cannot be distinguished from a “bot”. Nobody could point to a smart contract about Solana being a bot and even if they did as above we don’t treat them differently, that’s fairness. ”
Although many have pointed to bots as the reason for the sudden spike, no clear indications of bot activity have been found.
The STEP start was carried out via an Initial DEX Offering (IDO), ie the tokens are offered for sale via a decentralized exchange. STEP was made available on Raydium, a new Solana protocol. According to STEP’s Tokenomics page, 11.78% of the pre-sale offer went to investors, although this allocation is subject to a lock-up period.
Despite the divisive start, many Step Finance supporters celebrated the returns paid in Raydium’s STEP / USDC liquidity pool. At one point in the previous night, liquidity providers were earning 6,692.33% of the annual interest rate.
So ummmm… .STEP / USDC Staked @ RaydiumProtocol LP rewards are now displayed in the Step Dashboard… ..
You know how we properly display compound APYs for APRs
like … how do you pronounce this number? 🙃 $ STEP pic.twitter.com/jkrtuNyzCD
– Step Finance (@StepFinance_) April 25, 2021
DeFi is known for paying generous returns that far surpass the traditional financial world.
The phenomenon helped define DeFi summer 2020 when users of Ethereum assets quickly switched between pools of liquidity to take advantage of the opportunities offered by “income farming”. With apps like Step Finance growing rapidly, some have predicted a similar craze for the Solana ecosystem in 2021.
While other tokens looked shaky last week, Solana’s SOL token rose more than 40%. The market capitalization is now $ 12.45 billion, making it the 14th most valuable cryptocurrency. Serum’s SRM token is up 63.2% in the past 24 hours.
Many such tokens have been affectionately referred to as “Sam Coins” as Sam Bankman-Fried was involved in every project. Bankman-Fried heads Alameda Research, which has invested in Step Finance and many other Solana projects.
It remains to be seen how an extended Solana season would affect the rest of the cryptocurrency market. The project faces an uphill battle to overthrow its biggest rival, Ethereum, which remains the main hub for DeFi to this day. In 2021, Ethereum will ship EIP-1559 and Proof-of-Stake, while Layer 2 solutions like Polygon continue to gain momentum. The roll-up solutions Optimism and zkSync will also be available shortly.
However, with so many projects getting attention like Step Finance, it’s hard to see the Solana ecosystem failing soon.
Disclosure: At the time of writing, the author of this role owned ETH, MATIC, and several other cryptocurrencies.
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