Ethereum has proven to be the backbone of the web3 revolution. However, its consistently high gas fees and low transactions per second pose a challenge for an ever-growing ecosystem of users and developers.
Many projects are aiming to improve upon the scalability of Ethereum, with much of the attention focused on Layer 2 (L2) solutions which are built on top of Layer 1 blockchains such as Ethereum and Bitcoin. These L2 networks predominantly utilize either optimistic roll-ups or zero-knowledge (zk) rollups technology to increase transaction speed and throughput while maintaining security.
StarkWare is zk-rollup-based L2 and the latest competitor for a share of the L2 ecosystem. We’ll discuss the technology behind zk-STARKS, the company’s two main products, and some popular decentralized applications (dApps) for new users to explore.
An Overview of StarkWare
StarkWare Industries was founded in 2018 by Uri Kolodny, Alessandro Chiesa, and Eli Ben-Sasson, who founded Zcash, a privacy-focused cryptocurrency. The company invented ZK-Stark technology and has implemented it in its primary products, StarkNet and StarkEx, designed to improve blockchains’ scalability and privacy.
Starkware is one of two leading zk-rollup solutions currently in the market and competes with optimistic rollup solutions like Optimism and Arbitrum.
ZK-STARK (Zero-Knowledge Scalable Transparent Arguments of Knowledge) is a cryptographic-proof technology that uses lightweight hash functions to verify computational integrity trustlessly. It is a proof system that claims to be faster and more scalable than others while depending on lesser but safer cryptographic assumptions.
Like zkSync and optimistic rollup solutions, Starkware rolls up transactions into batches and proves transaction validity through cryptographic proof.
Starkware vs. Optimistic Rollups
Starkware is one of two leading zk-rollup solutions currently in the market besides zkSync, and part of the L2 ecosystem that includes optimistic rollups solutions like Optimism and Arbitrum. 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 proof.
- Starkware’s STARK cryptographic proofs are considered more complicated than the security employed by optimistic rollups.
- Optimistic rollups run smart contracts on the Ethereum network directly; zk-rollups do not.
Starkware vs. zkSync
zkSync is the other main competitor in the zk-proof solution market. The main differences between Starkware and zkSync are:
- The STARK computational security is more complex but considered a slightly superior product to zkSync.
- Starkware has the bigger ecosystem, and its StarkEx L2 solution is already used by several bigger DeFi protocols like DeversiFi and Celer.
What is StarkNet?
StarkNet is a decentralized ZK-rollup that operates as an Ethereum layer-2. A ZK-rollup is a layer-2 chain that uses zero-knowledge technology, such as ZK-STARK. ZK-rollups can scale to millions, even billions of people. And the more people use them, the cheaper they become. All this without compromising on Ethereum’s security and decentralization.
“in the medium to long term ZK roll-ups will win out in all use cases”Vitalik Buterin
StarkNet periodically batches transactions, which are given a ZK-STARK proof to validate the transactions on Ethereum, which allows thousands of transactions to be sent, verified, and batched off-chain to save gas and time by saving Ethereum from having to verify the validity of every transaction on-chain.
The StarkNet Alpha went live on the Ethereum mainnet on Nov. 29, 2021.
In July 2022, the StarkNet token (STRK) was launched. It operates the StarkNet ecosystem, including maintaining and securing the ecosystem while offering governance functions, such as voting on the ecosystem’s strategic goals, values, and evolution.
The token is also used to pay transaction fees on Starknet and participation in the StarkNet consensus mechanism. It is an ERC-20 token built on Ethereum, which will be allocated to StarkNet contributors, including StarkWare, its investors, and development partners.
At the time of writing, there is no way to purchase StarkNet Token. This no-sale period will remain in place until future notice by the StarkNet Foundation.
Further information on the design and tokenomics of the token can be found here.
How to use StarkNet?
To explore StarkNet, you will need to use a hot wallet. Currently, two wallet options are available, with Metamask soon adding support.
- Argent X, the first StarkNet wallet
- Braavos, a self-custodial solution
- MetaMask, a popular wallet that will soon support StarkNet
You can check out more dApps on Starknet by exploring dappland.com. This community-created website offers brief summaries of the wide selection of dApps available on the StarkNet network.
What is StarkEx?
StarkEx is a layer-two scaling solution tailored for specific dApps, particularly DeFi trading applications like dYdX and Immutable X.
StarkEx is a permissioned version of StarkNet, an L2 that is tailored-made to be used by protocols. While StarkNet is a decentralized zk-rollup that allows anyone to deploy their smart contracts without permission.
StarkEx can currently be used in three data availability modes: dApps can roll up their data on-chain in the zkRollup mode, process it off-chain in an option called Validium, or use a hybrid of the two called Volition.
For instance, dYdX relies on the zkRollup mode to offer fast and cheap transactions to its traders, while DeversiFi, Immutable X, and Sorare employ Validium mode.
This is all made possible by Cairo, the programming language Starkware products use. Furthermore, Shared Prover (SHARP) technology ensures that gas costs between transactions in a batch can be shared, resulting in very low gas fees on Starkware.
How to use StarkEx?
You can use StarkEx L2 technology in a few different DeFi Dapps:
- Connect to dYdX and fund your StarkEx L2 account.
- Fund your Immutable X account through StarkEx.
- Create an L2 account on Rhino.fi
- StarkWare Homepage – All your documentation needs plus current network information, including cumulative trading volume, total value locked, and the total number of transactions.
- StarkWare Medium – The latest updates and announcements from the StarkWare team.
- Starknet.io – Information regarding Starknet for developers and users alike. Equipped with their blog posts relevant to StarkNet.
- Voyager and Starkscan – Two blockchain explorers to choose from.
- StarkGate – The official token bridge from Ethereum to Starknet.