Starknet: What It Is and How It Scales Ethereum

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by

David Lee
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Ethereum is one of the most widely used blockchain platforms in the world. However, as more users join and more applications are built, the network becomes congested. This congestion causes high gas fees and slow transaction speeds. That is where Starknet steps in. It offers a solution by helping Ethereum scale efficiently and securely.

Starknet is a Layer 2 protocol that runs on top of Ethereum. It uses advanced cryptography to process thousands of transactions off-chain and then submits proof of those transactions to Ethereum. This makes everything faster and cheaper without sacrificing security. Understanding Starknet is important if you are involved in crypto, DeFi, NFTs, or just want to see Ethereum grow stronger.

What is Starknet

Starknet is a Layer 2 scaling solution designed to improve Ethereum’s performance. It handles transactions off the main Ethereum chain and posts only a summary back to the mainnet. It does this using a technology called STARKs, which stands for Scalable Transparent ARguments of Knowledge.

STARKs are a type of zero-knowledge proof. They allow This rollup protocol to prove that many transactions happened without revealing all the details. This approach helps maintain privacy and saves space on the Ethereum blockchain.

This protocol is often called a ZK-Rollup or validity rollup. These names refer to the way it processes and verifies transactions. It is part of a growing family of Layer 2 solutions that include others like Optimism, Arbitrum, and zkSync.

Breaking Down Starknet

To better understand this STARK-based system, let’s take a closer look at how it works and why it matters.

Ethereum can only process about 15 to 30 transactions per second. That might sound like a lot, but it’s not enough when thousands of users are active at the same time. As a result, users often face slow speeds and high costs. Starknet solves this by moving most of the work off-chain.

Here’s how it works step by step:

  1. Users send their transactions to Starknet instead of Ethereum directly.
  2. Starknet groups many transactions together.
  3. It creates a mathematical proof (STARK proof) that shows all the transactions were valid.
  4. This proof is then sent to Ethereum.
  5. Ethereum checks the proof and updates the blockchain.

Because Ethereum only verifies one proof instead of hundreds of transactions, it saves time and resources. This method allows Ethereum to scale without giving up its security or decentralization.

The key components of this scaling solution include:

  • Sequencer: Organizes and processes incoming transactions.
  • Prover: Creates the STARK proof that summarizes all transactions.
  • Verifier: A smart contract on Ethereum that checks the proof.
  • Cairo: A programming language used to write smart contracts on Starknet.

This structure allows developers to build complex applications without worrying about Ethereum’s limitations. For users, it means faster transactions and lower fees.

History

Starknet was developed by StarkWare, a company founded in 2018. The founders include cryptography experts who wanted to solve Ethereum’s scalability problems. Their first product was StarkEx, a custom scaling engine used by projects like dYdX and Immutable X.

Later, StarkWare introduced Starknet Alpha, a permissionless and general-purpose Layer 2 solution. This version allows anyone to build on Starknet, making it a key part of Ethereum’s scaling future.

YearMilestone
2018StarkWare founded
2019StarkEx launched
2021Starknet Alpha released
2022Ecosystem expanded
2023Decentralization roadmap published

Ecosystem Models

This Ethereum Layer 2 can be used in different ways, depending on the goals of the developers or projects involved.

StarkEx (Permissioned)

This version is built for companies or platforms that want more control. Only selected users can use it. StarkEx is fast and efficient but not open to everyone. Projects like dYdX and Immutable X use this model.

Starknet Alpha (Permissionless)

This version is open to the public. Anyone can write smart contracts or launch applications. Starknet Alpha supports decentralization and innovation.

ModelTypeDescription
StarkExPermissionedPrivate, controlled environment
Starknet AlphaPermissionlessOpen network for all developers

How does Starknet work?

This Layer 2 network collects many transactions off-chain. It then uses STARK cryptography to create a proof that these transactions are valid. Only this proof, not the actual transactions, is sent to Ethereum.

This process reduces the data load on Ethereum. It also keeps gas fees low. Users benefit because they can interact with dApps faster and cheaper.

For example, if 1,000 users make trades on a DeFi app, it can prove all 1,000 were valid using just one proof. Ethereum verifies the proof and moves on. This is much better than checking each transaction one by one.

Pros & Cons

Here is a quick look at the strengths and limitations of this Layer 2 network.

ProsCons
Fast and cheap transactionsCairo is new and still maturing
Strong security using STARKsEcosystem is smaller than Ethereum
Suitable for DeFi and NFTsOnboarding may be hard for beginners
Helps Ethereum scale effectivelyTools and documentation still growing

Uses of Starknet

This ecosystem is not just an idea. It is already being used in several important ways.

Decentralized Finance (DeFi)

DeFi apps like dYdX use this technology to offer fast and low-cost trading. Traders benefit from instant execution without paying high gas fees.

Gaming and NFTs

Immutable X uses this system to allow users to mint and trade NFTs with no gas fees. This makes it perfect for games and collectibles.

Private Identity Verification

It can be used for verifying identity without exposing private data. For example, a user can prove they are over 18 without showing their birthdate.

Smart Contract Development

Developers can write complex apps using Cairo, Starknet’s custom language. It is designed for performance and scalability.

Roadmap and Future of Starknet

This ecosystem has big plans for the future. The team is working on:

  • Decentralizing the sequencer
  • Improving developer tools
  • Reducing proof generation time
  • Growing the user base

The roadmap focuses on making Starknet faster, easier to use, and more secure for everyone.

Resources

David Lee

David Lee serves as an economist at Tech24. He earned a bachelor’s degree in economics from the University of Chicago and a master’s degree in finance from the MIT Sloan School of Business. His career includes: From 2008 to 2013, he worked as an economic reporter for the Wall Street Journal, where he wrote various economic and financial articles. Since then, from 2013 to 2017, he worked as an economic analyst at Bloomberg, where he analyzed global economic trends and wrote reports. From 2017 to now, he has provided in-depth analysis and insights in technology economics as an economic analyst at Tech24. David Lee’s specialty is global economic trends, financial market analysis, the convergence of technology and economy, and start-up and venture capital. He won the “Best Economic Reporter of 2019” award from the International Economic Journalists Association and received great acclaim for his economic analysis report titled “The Impact of Technology on the Economy.” In addition, he contributed to the expansion of his readership with the series Global Economic Outlook conducted by Bloomberg. His vision is to provide readers with in-depth insights into the convergence of the global economy and technology through Tech24, and to help them make better economic decisions. Emphasizing the positive impact of technology on the economy, he wants to explore strategies for sustainable economic growth.