Frequent CEO changes behind Starknet's deepening trust crisis

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

Last week, the Starknet Foundation announced a change in CEO, with Diego Oliva, who had served as CEO of the Starknet Foundation since March 2023, stepping down. James Strudwick, who is responsible for Starknet's ecosystem growth, will take over.

This is not the first significant executive change in the Starknet team this year. In January, StarkWare CEO Uri Kolodny posted on the X platform that he had resigned from his position due to family health reasons, and the CEO role was taken over by Eli Ben-Sasson, another co-founder and president of StarkWare.

Since the community backlash over airdrop distribution issues at the beginning of the year, Starknet has faced ongoing controversies. Recently, ZKX, a leading derivatives protocol in the Starknet ecosystem, announced its shutdown less than two months after its TGE, leading to a wave of criticism from investors, and Starknet Foundation members' defense of ZKX was also met with dissatisfaction.

Frequent CEO changes, coupled with Starknet's "inaction" following multiple public relations crises, have led community users to question the operational status of the organization behind it.

Is Changing CEOs Becoming a Habit After Controversies?

In the face of community disputes, the rapid change of CEOs seems to have become a habitual operation for Starknet.

On December 1 last year, after the official announcement of the airdrop, dissatisfaction arose within the community. Many ordinary users questioned Starknet's airdrop rules, claiming they favored developers while neglecting the interests of regular users.

After a month of ongoing airdrop controversy, StarkWare CEO Uri Kolodny suddenly announced his resignation due to family health reasons.

StarkWare has four core founders: Uri Kolodny, Eli Ben-Sasson, Alessandro Chiesa, and Michael Riabzev.

Among them, the departing CEO Uri Kolodny has a background in business and finance, while the others have a technical background. Uri Kolodny is a serial entrepreneur and has co-founded and served as CEO for companies like Mondria Technologies Ltd and Timna.

The incoming CEO, Eli Ben-Sasson, is a cryptographic scientist and the creator of the zk-STARK technology standard. He, along with another core member of StarkWare, Alessandro Chiesa, was a founding scientist at Electric Coin Company (also known as Zcash Co).

With the airdrop controversy still unresolved, the CEO's departure also sparked speculation among community users about potential internal conflicts within the team. Some users believe that Uri Kolodny's reason for resigning due to family health issues is too far-fetched. Furthermore, after Uri announced his resignation, Eli Ben-Sasson did not express any condolences, which further confirmed suspicions of internal discord.

Just six months after the change of StarkWare's CEO, Starknet faced another controversy following the shutdown of the leading derivatives protocol ZKX, leading to another executive change. Starknet Foundation CEO Diego Oliva stepped down, and James Strudwick, the head of ecosystem growth, took over.

Diego Oliva served as CEO of the Starknet Foundation for just over a year. Before joining Starknet, he was the regional director for Facebook in Europe, the Middle East, and Africa, responsible for growth in those regions.

Starknet has not provided any explanation for Diego Oliva's departure, only stating that the team structure of the Starknet Foundation has been initially established, and it is time to hand over the leadership.

The Starknet official blog mentioned that during Diego Oliva's tenure, the Starknet Foundation has grown from a team of two part-time employees to over thirty; it has launched multiple ecosystem initiatives such as DeFi Spring, Seed Grants, and the Catalyst and Propulsion programs, and collaborated with over 100 infrastructure teams.

The incoming CEO, James, has only been with the Starknet Foundation for about six months and has mainly advanced work on DeFi, L1, and L2 expansion projects.

Regarding the frequent changes in CEO, while community users have some expectations for the new leadership, there seems to be more pessimistic voices. Twitter user @Timmy_Turnes stated, "I feel we are heading towards a new low…"

@TheJinKang believes Starknet is facing a crisis of trust. He stated that after the shutdown of the ecosystem project ZKX, neither the Starknet Foundation nor the CEO has formally responded. The change in CEO at this time indicates that the organization's operational status is very poor.

@wholisticguy expressed doubts about the new CEO of the foundation, who was previously the head of the ecosystem, noting that his X account had only over 400 followers (which grew to over 900 after being announced as CEO).

@wholisticguy stated, "As one of the technically most capable L2 teams, gaining Twitter followers should be as easy as shooting fish in a barrel. I’m not asking for 100,000 followers, but having only a few hundred indicates a lack of engagement."

Starknet's Self-Created Public Relations Crises

Changing CEOs may also be Starknet's self-rescue strategy in the face of sluggish development and public relations crises.

Historically, Starknet has relied on its technical strength and Vitalik's investment involvement, but it seems particularly laid-back in terms of marketing and public relations.

Whether it’s the airdrop controversy or the shutdown of the ecosystem project ZKX, Starknet has rarely taken action in response to the ongoing community sentiment, and team members have made several ill-timed comments that sparked new public relations controversies and trust crises.

In January of this year, Starknet was frequently rumored to be airdropping but delayed in doing so, and already agitated community users faced what they perceived as "sarcasm" from Starknet's official channels.

Starknet core member Abdelhamid Bakhta publicly referred to community users inquiring about the airdrop status as "e-beggars" on social media. Additionally, Starknet created a new sub-channel called "e-beggars" in its official Discord channel, inciting outrage within the community.

Although after the public backlash, Abdelhamid and the Starknet official channel quickly deleted the comments and apologized, both Abdelhamid and Starknet CEO Eli Ben-Sasson faced prolonged online harassment as a result.

Currently, the comments section of Starknet's official social media still sees sarcastic remarks like "e-beggar chain."

Regarding the widely circulated claim in April that "Starknet has only 8 daily active users," although it was later confirmed to be a false rumor, many crypto users still believe this reflects Starknet's true situation.

Recently, a similar public relations disaster unfolded again, as ZKX, a leading derivatives protocol in Starknet, announced its shutdown just six weeks after its TGE, leading ZKX investors to criticize it and label it a scam, demanding StarkNet and the exchanges to reveal the truth.

In response, Starknet's official channels remained silent, while Starknet Foundation member Henri defended ZKX, stating, "ZKX has been contributing to the ecosystem for years… It is completely inappropriate to label them as scammers due to some wrong decisions (I do not defend those decisions). This will negatively impact you and your judgment."

The seemingly ill-timed comments from Starknet Foundation members once again sparked user dissatisfaction, with Starknet being mocked for having only single-digit daily active users.

The criticism of ZKX has also escalated to questioning the status of the Starknet ecosystem. Several community users claimed that the lack of activity in the Starknet ecosystem was a key reason why the ZKX team could not sustain itself even after securing funding.

According to Artemis data, compared to other layer 2 solutions like Arbitrum, Optimism, and zkSync, Starknet currently ranks last in terms of daily active users, daily transaction volume, and DEX daily trading volume, capturing the lowest transaction fees. Moreover, while many layer 2 solutions are generating positive profits, Starknet has yet to become profitable.

Expanding the BTC Ecosystem Narrative, Is Starknet Still Worth Expecting?

After being mired in public relations crises, declining network activity, and plummeting token prices, developers in the Starknet ecosystem @cryptonerdcn have lowered their expectations for Starknet.

However, @cryptonerdcn stated that they are not overly pessimistic. Based on the participation in Starknet's hackathon in June, the activity level of its ecosystem developers is not as bleak as imagined.
@cryptonerdcn mentioned that after the token price crash, they initially thought there would be few participants, but ultimately estimated that at least 75 teams participated. "It’s important to note that because Starknet uses the Cairo language, which is understood by very few compared to Solidity (I remember it being only a fraction), many projects in this hackathon started completely from scratch compared to EVM-based projects that can use various wrappers."

In @cryptonerdcn's view, if Starknet can make efforts in areas like marketing, it at least won't directly become a "dead end."

From Starknet's recent developments, continuous technical upgrades remain a top priority. According to the Starknet community's release of v0.13.2 and the summer roadmap, the upcoming v0.13.2 version in August aims to reduce block time without increasing L1 costs, targeting an average transaction confirmation time of around 2 seconds.

The v0.13.3 version is set to be launched between October and November, with essential features including Cairo-native support, emphasizing faster execution to further shorten confirmation times.

However, the Ethereum Layer 2 space is highly competitive, and relying solely on increasing TPS and low fees is no longer sufficient to drive new growth expectations.

If the Ethereum Layer 2 narrative continues to languish, @cryptonerdcn looks forward to Starknet's narrative space in the BTC ecosystem.

In June of this year, Starknet announced that it would become the first network to settle simultaneously on Bitcoin and Ethereum, expanding Bitcoin's capacity to thousands of transactions per second. This is expected to be achieved within six months after the potential upgrade OP_CAT for Bitcoin.

Crypto technology analyst Haotian stated that while Starknet's layout in the Bitcoin ecosystem faces many technical challenges and uncertainties, "once it breaks free from the narrative constraints of (Ethereum) Layer 2, Starknet's imaginative space will be vastly different."

In Haotian's view, if Starknet extends into Bitcoin ecosystem application scenarios, its underlying ZK technology, parallel transactions, and Cairo language will serve as core advantages that distinguish it from other Layer 2 solutions.