Sky High: How Stargaze is Bringing NFTs & Social Networking to Cosmos
NFTs performed so well in 2021 that blockchains couldn't keep up. That's why Stargaze built an L1 NFT blockchain for creators and investors alike.
Updated Jun 28, 2022
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NFTs are a potential paradigm shift in how we interact with content. Most people are familiar with being media 'consumers,' but social media has changed that dynamic by giving everyone a platform to express themselves and foster online communities. The main critique of social media is centralization, specifically how a few platforms dictate the algorithms that decide which posts hit your feed and which ones don't. There are many ideas for how blockchains can be used to enhance the social media experience.
Although the Stargaze NFT marketplace is currently in beta, it's fully functional with several NFT collections already listed on it.
While NFTs have become staples of digital identity, the blockchain infrastructure they're built on isn't scalable or robust enough to support an active social network. That's why Stargaze is challenging that with their blockchain that aims to be the foundation of a decentralized social network structured around cryptocurrencies and NFTs.
What is Stargaze?
What is Stargaze?
Stargaze is a Cosmos-based blockchain for minting and trading NFTs. Stargaze is a proof of stake (PoS) blockchain and uses the IBC protocol for interoperating with other Cosmos-based networks like THORchain and Cronos. The goal of Stargaze is to become a Web3 social networking protocol where its native STARS token is used to mint social tokens for sharing posts and interacting with content on the blockchain.
Stargaze's native cryptocurrency is STARS and it's used mainly for governance and staking. 25% of STARS supply was initially airdropped to ATOM and OSMO stakers for free, but those ineligible for the airdrop can buy STARS from the Osmosis decentralized exchange (DEX). Validators must stake STARS to earn rewards for securing the network, but it's easier to delegate STARS to a validator to earn part of their rewards.
STARS is primarily used for voting on Stargaze governance upgrades and for membership in the Stargaze curation decentralized autonomous organization (DAO), but it also has other important functions. For one, STARS are used to mint NFTs and are staked to pay for on-chain storage space for NFT content. The Stargaze NFT marketplace uses STARS as its native currency, but other use-cases like minting social tokens will be implemented to STARS in the future.
Stargaze has a built-in liquid staking solution so that users can vote in Stargaze governance while their STARS tokens earn staking yield. Stargaze's liquid staking token is STARX and it's used to vote on governance, reward creators, and buy social tokens called "creator coins." The STARX token is also used to reward the platform's users for creating and voting on posts. The STARS inflation rate is currently high to incentivize users and validators, but this is intended to begin declining a year after the Stargaze launch.
While the STARS price has moved -92.98% since the project launched in late 2021, this shouldn't be a cause for alarm for Stargaze's health or future potential. STARS is still a very small altcoin with a market capitalization of only $12,940,032 at a price of $0.02188. The decline of STARS price is largely due to a lack of token utility, but this could turn around as more users join Stargaze and the token gains new functions.*
The Stargaze NFT marketplace has potential as a decentralized alternative to Opensea, which could be a promising prospect for STARS since it's both Stargaze's governance token and medium of exchange. This means STARS could gain market value as more users want to use STARS to directly influence the Stargaze NFT protocol. The inclusion of a staking mechanism may also contribute to an increase in STARS price since there's a strong incentive to lock tokens to earn passive yield.
Half of the initial 1 billion STARS supply went to insiders like founders, advisors, seed investors, and the Stargaze foundation and are locked for at least one year. A quarter of the initial supply was distributed via airdrop and 20% was deposited into the Stargaze DAO community pool. The remaining 5% was set aside for validator rewards to incentivize them to secure the network.
Out of the maximum STARS supply of 4 billion tokens, only about 27% have already been issued. The issuance of STARS tokens will last five years and will decrease by one-third each year. While this gradual issuance schedule is beneficial for the long-term adoption of Stargaze, the high concentration and short vesting schedule of STARS held by insiders could hurt the near-term price performance of the token.
Why use Stargaze?
Why use Stargaze?
One obstacle Stargaze must overcome is Ethereum's dominance in the NFT market. While most NFT marketplaces and projects are on Ethereum and layer-2 networks like Polygon, being a Cosmos-based blockchain gives Stargaze certain advantages. As an IBC blockchain, Stargaze is more interoperable and has lower transaction fees than other networks. Stargaze may also be more scalable than other networks due to its layer-1 PoS infrastructure dedicated to minting and trading NFTs.
In addition to the interoperability provided by IBC, Stargaze also plans to develop a cross-chain bridge with Ethereum to transfer existing NFTs into the ecosystem—potentially bringing a deluge of new users. Another feature in store for Stargaze is NFT staking, which could make Stargaze NFTs as productive as other DeFi assets. While these features are promising ways to enhance what investors can do with NFTs, it's unclear when Stargaze will implement them since it doesn't have a long-term roadmap.
How Stargaze works
How Stargaze works
The only features that are currently live on the Stargaze blockchain are the NFT Launchpad, NFT marketplace, governance, and staking. The NFT Launchpad is where users can mint Stargaze NFTs made by pre-approved artists and the marketplace is where users can buy and sell NFTs for STARS tokens. Although the Stargaze NFT marketplace is currently in beta, it's fully functional with several NFT collections already listed on it.
The Stargaze ecosystem was designed with three distinct user roles in mind and the most pivotal of them are creators. Creators are artists or content producers that contribute to Stargaze by making NFTs to be minted on the blockchain. While Stargaze NFTs are still mostly GIFs and JPEGs, there are plans to integrate new media types like videos and polls into NFTs. Stargaze plans to use NFTs like posts on a social network where users can vote on them with tokens called CREDITS that convert to STARX 24 hours after they're used.
Stargaze intends for most active users of its social protocol to be curators who earn rewards for discovering and appraising NFT content. Just like how social media users can like and share posts, curators will be able to vote on NFT content they like to both earn rewards and reward creators. Rewards are made up of STARX tokens that are split amongst creators, curators, validators, and delegators. Stargaze will use a quadratic voting mechanism, which means creators will earn exponentially more rewards as their NFTs gather more votes from curators.
Stargaze users can follow their favorite NFT creators by purchasing their creator coins. Creator coins are tokens that will be purchased with STARX and are automatically staked to the network to earn yield for their respective creator. The number of creator coins you hold will determine how often that creator will show up on your content feed, which is radically different from the algorithms used by Web2 social networks. Creator coins will allow for creators to be directly supported by other users while incentivizing them to produce more content on Stargaze.
How to use Stargaze
How to use Stargaze
The best way to use the Stargaze NFT marketplace and stake STARS tokens is with the Keplr wallet. Keplr is a browser extension DeFi wallet like Metamask with the only difference being that it works with Cosmos-based blockchains instead of Ethereum-based ones. Kepler makes it super convenient to transfer assets between IBC blockchains, which you'll have to do to use Stargaze. STARS isn't available on centralized exchanges, so the best way to get some is by trading it for ATOM on a Cosmos-based DEX like Osmosis.
While Stargaze isn't currently available on Coinbase, ATOM is available on this popular crypto exchange. The platform even supports staking of some cryptocurrencies, which allows you to earn up to 5.75% APY.
*STARS data current as of 6/28/22