Founded in 2018, Starkware builds StarkNet and StarkEx, both second-tier (L2) scaling solutions for Ethereum using zero-knowledge rollup technology.
Starkware is one of the two leading zk-rollup solutions currently on the market in addition to zkSync and is part of the L2 ecosystem that includes optimistic rollup solutions such as Optimism and Arbitrum.
In this guide to the Starkware ecosystem, CoinMarketCap Alexandria examines:
- What is Starkware
- A comparison between Starkware and other L2 blockchains
- Starkware investors and its roadmap
- Starkware tokens and airdrop potential
- How to use StarkEx and StarkNet
- The Starkware ecosystem
What Is Starkware?
Starkware is an Israel-based company that builds second-tier blockchains for Ethereum using zk-STARK for computational security.
Invented by Starkware, zk-STARK (Zero-Knowledge Scalable Transparent Arguments of Knowledge) are scalable and transparent cryptographic proofs that use lightweight hash functions to reliably verify computational integrity. Put simply, it is a test system that claims to be faster and more scalable than others, while depending on smaller but more secure cryptographic assumptions.
Like zkSync and optimistic rollup solutions, Starkware rolls up transactions in batches and demonstrates the validity of transactions through cryptographic proof. Starkware is building two main products: StarkNet and StarkEx.
What Is StarkNet?
StarkNet is a second-level decentralized blockchain without authorization based on zk-rollup. Like its rivals L2, StarkNet executes transactions and transmits transaction data to the Ethereum mainnet in batches, protected by STARK evidence. StarkNet therefore benefits from the security and composability of Ethereum, but can scale transactions on Ethereum thanks to its EVM compatibility. StarkNet Alpha went live on the Ethereum mainnet on November 29, 2021.
What Is StarkEx?
StarkEx is a second-tier scaling solution tailored to specific DApps, especially DeFi trading applications such as dYdX, DeversiFi, and Immutable X, an NFT blockchain. In general, StarkEx is an authorized version of StarkNet, a layer two tailored to be used by protocols, while StarkNet is a decentralized zk-rollup that allows anyone to deploy their smart contracts on it without authorization.
StarkEx can currently be used in three data availability modes: DApps can choose to roll up their data on-chain in zkRollup mode, process it off-chain in an option called Validium, or use a hybrid of the two called Volition.
For example, dYdX relies on zkRollup mode to offer fast and cheap transactions to its traders, while DeversiFi, Immutable X and Sorare use Validium mode.
This is made possible by Cairo, the programming language used by Starkware products. In addition, Shared Prover (SHARP) technology ensures that the cost of gas between transactions in a batch can be shared, resulting in very low gas rates on Starkware.
Starkware vs Optimistic Rollups
Starkware is one of the leading zk-rollup solutions out there right now. However, it is also competing with optimistic rollups. Here are the main differences between Starkware and optimistic rollups:
- Starkware has no dispute period for transactions as they can be verified as valid without evidence.
- Starkware’s STARK cryptographic proofs are considered more complicated than the security employed by optimistic rollups.
- Optimistic rollups execute smart contracts directly on the Ethereum network, zk-rollups do not.
Starkware vs zkSync
Here are the differences between Starkware and zkSync, another zk-proof L2 solution:
- STARK computational security is more complex but considered a slightly superior product to zkSync.
- Starkware has the largest ecosystem, and its StarkEx L2 solution is already used by several larger DeFi protocols such as DeversiFi and Celer.
In a multichain future, it can be assumed that Starkware and zkSync will most likely coexist and serve different protocols and use cases.
Starkware team, investors and roadmap
Starkware is an Israeli company founded in 2018 that focuses on zk-rollup technology and the downsizing of the Ethereum blockchain. It was founded by Eli Ben-Sasson, co-inventor of STARK evidence and professor of computer science. Ben-Sasson was also involved in the founding of ZCash, a privacy-focused cryptocurrency. Other co-founders include Alessandro Chiesa, Michael Riabzev and Uri Kolodny.
Starkware released the V1 version of StarkEx in June 2020, which was the first commercial version of STARK technology and was used by Deversifi. The V2 version followed in December 2020 and included Stark evidence generated by Cairo, ERC-721 support, and faster connectivity to the Ethereum mainnet. In the future, Starkware plans to launch StarkNet in several stages, which will see interoperability between different applications and a large-scale implementation.
Starkware has so far raised $165.5 million in several investment rounds. The May 2018 seed round raised $6 million, followed by a Series A increase of $30.5 million with the involvement of crypto VC funds such as ConsenSys, Dragonfly Capital and many more. In June 2021, the company closed a $75 million Series B increase with the involvement of Paradigm, Alameda Research, Three Arrows Capital and others. In November 2021, the $50 million Series C round valued Starkware at $2 billion. The round was joined by Sequoia, Alameda Research, Founders Fund, Paradigm and Three Arrows Capital. The company also counts Ethereum co-founder Vitalik Buterin as an investor.
Will there be a Starkware STK and Airdrop token?
Like zkSync, Starkware does not currently have a token. However, an article on CryptoBriefing in rumors of token drops lists Starkware as one of the possibilities.
The article mentioned that the team “did not completely reject the idea. On the StarkWare Discord server, team members often answer questions about a token with “no comments.” One of StarkWare’s key initiatives is to decentralize StarkNet, and a popular method of doing so is to issue a governance token.
Although there is no guarantee that a Starkware token airdrop will occur, check out our guide that explains what cryptographic airdrops are and how you can participate in them.
How to use StarkEx
You can use StarkEx L2 technology in several DeFi Dapps:
- Connect to dYdX and fund your StarkEx L2 account.
- Fund your Immutable X account via StarkEx
- Create an L2 account on DeversiFi
Best StarkEx DApps
dYdX is a decentralized exchange for futures trading. Traders can engage in trading non-custodial futures directly from their portfolio. Thanks to StarkEx, dYdX offers faster transaction speed, reduced trading fees and lower minimum trading size than is normally possible on a DEX.
Using StarkEx, dYdX can also eliminate gas fees, making the exchange a legitimate alternative to centralized exchanges. The stock exchange’s focus is on derivatives and margin trading.
Find out more in our deep dive in dYdX.
Immutable X is a level two scaling solution for NFT on Ethereum. It is built on StarkEx, allowing it to eliminate gas taxes and increase the transaction speed of the chain.
Immutable X aims to position itself as the “NFT blockchain” of the future, hosting several Web3 games and decentralized NFT-based applications. Immutable X currently supports blockchain games such as Illuvium, Gods Unchained, Guild of Guardians and others.
Check out our list of the best play-to-earn (P2E) blockchain games.
DeversiFi is a decentralized exchange based on StarkEx. Users can trade tokens on the exchange, store them in their DeversiFi wallet and invest in different products for return. Thanks to StarkEx technology, DeversiFi is also able to offer a gas-free market for token launches.
Sorare is a football-themed app with partnerships with 245 football teams, including some of the world’s biggest names from Real Madrid, Liverpool to Paris Saint-Germain and more. It offers a global fantasy football game with NFT digital collectibles of collectible cards that can be collected and exchanged without commissions on gas thanks to StarkEx.
How to use StarkNet
StarkNet is still in its alpha phase and cannot be used like other level two solutions. However, you can still interact with StarkNet DApps – to do so, you’ll need a warm wallet. Currently, there are two wallet options available and one coming soon.
- Argent X, the first StarkNet wallet
- Braavos, a self-custodial solution
- MetaMask, a popular wallet that will soon support StarkNet
Argent was the first DeFi wallet to be deployed on StarkNet and has over 3.5 million transactions. In addition to being a custody solution, it also offers vaults for users to earn yield on their crypto assets. Argent is backed by major investors such as Paradigm, Index Ventures and others.
How to use Argent
You can use Argent with a few simple steps:
1. Download Argent from the App Store or Play Store
2. Click on “Create new wallet”
3. Choose a username
4. Click on “Top up” to fund your account or on “Receive” to share your address
5. Activate your account by depositing. After the first deposit on Ethereum, you will be able to use the L2 chain for future deposits
Braavos is another StarkNet native DeFi wallet with a built-in media NFT player. It is self-custodial and allows users to manage their crypto and NFT tokens in one place.
How to use Braavos
You can use Braavos with a few simple steps:
1. Download the Braavos extension for Firefox or Chrome
2. Create a password and write down the 12-word seed phrase
3. Send and receive tokens on Alpha testnet. Braavos works just like other web wallets like Metamask, so the UX should look familiar to experienced DeFi users
Metamask has announced a strategic partnership with Starkware, making it the first zk-L2 supported by the popular web portfolio:
To use Starkware on Metamask, you need to install Metamask Flask and Starknet Snap. However, Metamask only advises developers to try the new integration, which is still in Alpha and has bugs. If you want to give it a try, Meta provides a guide on how to install Starknet Snap.
Best StarkNet DApps
StarkNet is currently only available in testnet. However, according to @Astralytica, a Twitter account that provides data and educational content on zk-rollup, more than 120 projects are currently under construction on StarkNet.
Some of the best live applications on the starknet testnet include:
StarkGate is the official token bridge from Ethereum to Starknet. During the current Alpha version, StarkGate is limited to maximum deposits of 0.25 ETH and 50 DAI. You can find the full documentation on the bridge here.
Orbiter Finance is a decentralized cross-rollup bridge with smart contracts only on the destination side and is building Ethereum’s future multi-rollup infrastructure. It is available for both Optimistic and zk-rollups. You can find more information about Orbiter Finance in the Orbiter Finance FAQ.
LayerSwap is another token bridge for L2 chains such as Starkware, zkSync, Optimism, and Arbitrum. LayerSwap calls its bridge technology Bransfer and promises that Bransfer makes it “easy and secure to connect your crypto exchange accounts.” You can learn more about LayerSwap here.
Alpharoad is a non-custodial DeFi platform and a decentralized exchange. It allows users to earn returns with its Alpha Road investment strategies and will offer NFT as a financial utility. Users will be able to trade their crypto assets using Alpharoad AMM.
mySwap was one of the first protocols to be launched on StarkNet. It is an automated decentralized exchange based on market makers (AMM) for token swaps, currently on the testnet.
JediSwap is another AMM-based DEX for token swaps and liquidity provision. Users can enter a liquidity pool (LP) by providing two assets or “zap” their tokens to be included in the pool in one click.
xBank Finance is a liquidity marketplace on StarkNet. Users can be lenders by depositing assets in the xBank deposit markets or borrowers by making a deposit and using their crypto assets as collateral. The liquidators impose security and functionality on xBank, and the governors participate in the protocol governance process.
Yagi is a surrender platform and network of custodians that automate protocol actions. Users can earn returns on their crypto assets by depositing them in vaults. Using automated protocol actions, users can participate in return opportunities. Yagi enables on-chain transparency of execution requirements and can be managed by creating only two smart contract functions.
Starcombo is a tool that allows users to build yield optimization strategies, called “combos” on different DeFi protocols. A combination allows users to access DeFi protocols and combine different investment strategies into a single transaction on Starknet. Starcombo is so far only integrated with Jediswap and Myswap and does not charge fees for its combos.
Aspect is the first NFT marketplace built on StarkNet. It claims to provide up to 100 times lower fees for NFT trades and has a fully decorated market. Users can buy or sell NFT on Starknet Alpha Testnet and create new NPTs by uploading visual assets. Aspect is also integrated with the Argent DeFi wallet.
Briq is a 3D block NFT protocol that is building composable and interoperable NFTs. Briqs are “NFT matter” that can be used to create NFTs called “sets”, which can be assembled, combined and culled to be reused.
Bitmapbox is a 2D on-chain block building game on StarkNet. Users can use the blocks to create an NFT on level 1 or create new on-chain games. The blocks are ERC-1155 NFT standard, and the creations are ERC-721.
Mintsquare is a modular NFT marketplace. It is available on both StarkNet and zkSync 2.0. Mintsquare aims to become something like “OpenSea of L2 zk-rollups” with its goal of “embarking the next 100 million people to mint and trade NFT assets.” So far, Mintsquare allows the minting of new NFTs by uploading multimedia content from the desktop.