What is StarkNet Cryptocurrency and Blockchain?

Main

• starknet is a decentralized second layer solution (Layer 2) for scaling the Ethereum network. StarkNet is based on the ZK-STARK cryptographic mechanism.
• The main developer of the protocol is the Israeli company StarkWare.
• As of October 2022, an alpha version of the main StarkNet network is running with limited functionality. At the same time, the project ecosystem already has more than 120 projects, and the StarkNet mainnet processes 3-6 million transactions per week.
• The StarWare developers have already issued the Starknet Governance Token (STRK) ERC-20 standard for investors, employees and development fund. Free circulation and trading of STRK may start at the beginning of 2023.

Who created StarkNet?

The StarkNet L2 network is being developed by the Israeli company StarkWare Industries, founded in 2018. Among the founders of the project is the well-known cryptographer Elie Ben-Sasson, professor at Technion University and co-inventor of the STARK technology, who also previously participated in the creation of the anonymous Zcash cryptocurrency. The co-founders also became Mikhail Ryabtsev (co-author of ZK-STARK), Uri Kolodny and Alessandro Chiesa (co-founder of Zcash) are also widely known in the crypto community.

From January 2018 to May 2022, several funding rounds took place, in which the company managed to raise a total of $273 million.

The first commercial application of ZK-STARK technology was the launch of StarkEx in June 2020. This is a local solution for scaling Ethereum within specific decentralized applications, which is already successfully used by the dYdX, Rhino, Sorare and Immutable platforms.

The next stage in the development of the project was the launch of the alpha version of the main StarkNet network at the end of 2022.

It is assumed that in the future the StarkEx platform will become the “third layer” of the project, deployed on top of StarkNet for specific DeFi protocols to make their use easier and cheaper.

How does the StarkNet network work and how is it structured?

StarkNet is a permissionless zk-Rollup where smart contracts are written in Cairo’s proprietary programming language.

What are the benefits of StarkNet over other L2 solutions for Ethereum?

Currently, the most actively used L2 networks in terms of the amount of blocked liquidity (TVL) and the number of launched DeFi protocols are Arbitrum and Optimism, based on the Optimistic Rollups technology.

The main difference between StarkNet and competitors consists in transaction processing. In Optimistic Rollups, to speed up processing, all transactions are considered genuine until proven otherwise. In the event that a node turns out to be malicious and allows incorrect transactions, there is a seven-day period during which the transaction can be challenged and canceled by verifiers.

On StarkNet, the use of ZK-STARK allows proof of authenticity to be sent along with a transaction, and there is no period during which a transaction can be disputed. This simultaneously increases productivity and reduces gas costs.

The difference from another promising L2 project called zkSync is the use of a different verification protocol called ZK-SNARK.

How believe some cryptographers, ZK-STARK technology:

• more secure at all stages of setup and operation;
• potentially up to 10 times more scalable than ZK-SNARK;
• resistant to attacks using quantum computers.

Will StarkNet have its own cryptocurrency?

In July 2022, the StarkWare team confirmed plans to issue a project governance token that will play a key role in the decentralized governance and maintenance of the ecosystem.

The issue of the asset is not yet known. starkware will issue the first 10 billion ERC-20 tokens on the Ethereum network. They will be distributed in the following way:

• 17% – to investors;
• 32.9% – to key community members (StarkWare employees, consultants and third-party developers);
• 50.1% are StarkNet Foundation organizations. According to the plans, only 10% will be left at the disposal of the fund, the rest of the tokens will be used for community awards, grant programs, donations and for other purposes.

All tokens allocated to investors and the team are locked for sale for 1 year and will be unlocked linearly over the next 4 years.

The STRK token will perform three main functions:

• participation in network management;
• payment of commissions for transactions in StarkNet;
• participation in the consensus mechanism and transaction processing.

The crypto asset is planned to be released in October 2022. The StarkNet Foundation is expected to host an airdrop among community members in early 2023. To reduce the likelihood of retrodrop hunters participating, no specific snapshot date will be announced.

What is the StarkNet Ecosystem?

As of fall 2022, StarkNet is developing or already running over 120 projects. The basic infrastructure and all the main types of DeFi services have also been created, which allows users and developers to evaluate all the advantages of the new L2 solution:

1. Web3 Wallets Argent X And Braavosas well as MetaMask (only with Metamask Flask and Starknet Snap plugins);
2. Block Explorers StarkScan And Voyager;
3. Asset Transfer Bridges – Official StarkGate Bridge and 3rd Party Services Orbiter Finance, layer swapKubri and Suez;
4. Decentralized crypto exchanges (AMM-DEX) mySwap, JediSwap, 10KSwap, and a fork of Uniswap launched in October 2022 the development team of the Ethereum client Nethermind;
5. Landing service xBank Finance;
6. NFT Marketplaces Aspect And mintsquare;

NFT games Imperium WarsDope Wars, Frens Lands, Loot Realms, etc.

How to start using StarkNet?

Although the network StarkNet is still in alpha state, it is publicly available to users. To start working in it and use running DeFi applications, you need to:

• install the Argent X wallet as a browser extension and register in it;
• open a cross-chain bridge StarkGate and transfer ETH from the Ethereum network or one of the available L2 networks (Optimism, Arbitrum, etc.) – this requires simultaneous connection of the Agent X and MetaMask wallets;
• connect Agent X to any of the available DeFi or NFT applications and make transactions there, confirming them in the wallet and paying fees in ETH.

What are the prospects for StarkNet?

As of October 2022, StarkNet is processing 3-6 million transactions per weekwhich is an indicator of high user activity.

By the end of 2022, StarkWare plans to take steps towards the decentralization of StarkNet: the software for running sequencers and verifying transactions will become publicly available. It is assumed that financial incentives will be launched for Provers, Sequencers and Full Node Operators, who will begin to receive a portion of transaction fees.

Also, after the launch of the STRK token, mechanisms for coordination and management based on the DAO will be developed.