Blockchain scalability has long been a challenge for Ethereum and other blockchain networks. The ability to handle a high volume of transactions is a major concern because, when too many transactions occur simultaneously, the blockchain struggles to process them efficiently. This leads to high transaction fees and slower processing times. Starknet is designed to address these issues. Let’s explore what Starknet is, how it works, and the importance of its native token, STRK.
What is Starknet?
Starknet is a layer-2 solution built on top of the Ethereum blockchain to enhance its scalability and improve transaction speeds. It is a permissionless, zero-knowledge proof (ZK-proof) rollup that processes transactions off-chain and submits the proof of those transactions back to Ethereum’s main network.
By processing transactions off-chain, Starknet reduces the load on the Ethereum blockchain, which in turn lowers transaction costs and improves processing speed. Starknet is considered one of the most significant layer-2 projects within the blockchain industry due to its unique approach to scalability.
How Does Starknet Work?
The main challenge with the Ethereum blockchain is that it can only process a limited number of transactions per second. Starknet addresses this limitation by taking thousands of transactions off Ethereum’s main network, bundling them together, and processing them separately. Once these transactions are validated, Starknet submits a single proof to Ethereum, ensuring all transactions are legitimate.
Starknet uses a technology called ZK-STARK (Zero-Knowledge Scalable Transparent Argument of Knowledge). This technology ensures that transactions are processed quickly while maintaining a high level of security and privacy. Starknet’s use of ZK-STARK allows it to scale efficiently while protecting the integrity of the transactions.
Despite being built on the Ethereum blockchain, Starknet is not directly compatible with the Ethereum Virtual Machine (EVM). Developers wishing to create decentralized applications (dApps) on Starknet must use a different programming language called “Cairo,” which was specifically developed for Starknet.
Key Components of Starknet Architecture
To better understand how Starknet achieves scalability, it is important to look at its two main components: Sequencers and Provers.
Sequencers
Sequencers are the powerful entities responsible for executing transactions in Starknet. They are more efficient than Ethereum’s validators and can handle more transactions per second. Their role is to process transactions, reject invalid ones, and bundle valid transactions into blocks.
Once a block of transactions is processed, the sequencer submits it for validation. The sequencer then proposes this block to the network, which consists of other sequencers. If the block is approved by the network, it is sent to the provers for verification.
Provers
Provers are responsible for verifying that the transactions in the block are valid. They trace each transaction within the block and ensure the data aligns with the correct execution trace. If any part of the data is invalid, the block will not be processed.
Once the data is verified, provers randomly sample data from the block and generate a “proof” — a mathematical guarantee that the transactions are valid. This proof is then submitted to the Ethereum blockchain.
Who is Behind Starknet?
Starknet was developed by StarkWare Industries, an Israeli blockchain company known for its contributions to Ethereum scaling solutions. StarkWare launched StarkEx in June 2020, which was a permissioned network designed for specific decentralized applications (dApps). Later, Starknet was introduced as a more comprehensive layer-2 solution, and it officially launched in February 2022.
StarkWare has gained significant traction within the blockchain space, handling large volumes of trading and decentralized finance (DeFi) transactions. As of February 2024, StarkWare had facilitated over $1.2 trillion in cumulative trading and $832 million in total value locked (TVL).
When Was Starknet Token (STRK) Launched?
While Starknet itself launched in February 2022, its native token, STRK, was introduced two years later in February 2024. The STRK token was distributed through an airdrop, with over 700 million tokens made available to the community. The token launched at a price of approximately $2.38, but, like most crypto assets, its price saw fluctuations following the airdrop.
The STRK token is integral to the functioning of Starknet. It is used to pay for transaction gas fees and allows holders to participate in the governance of the network. Token holders can either vote directly on network decisions or delegate their votes to trusted representatives.
The Role of STRK Token
The STRK token plays several key roles within the Starknet ecosystem. One of its primary uses is to pay for gas fees when executing transactions. Gas fees are essential for processing transactions on the blockchain, and STRK enables users to make these payments in a decentralized manner.
In addition to transaction fees, the STRK token is used for governance. Token holders have the ability to vote on important protocol upgrades and changes to the network. This decentralized governance model ensures that the community has a say in the future direction of Starknet.
Conclusion
Starknet is an innovative layer-2 scaling solution for Ethereum, designed to address the network’s scalability issues. By processing transactions off-chain and utilizing ZK-STARK technology, Starknet reduces transaction costs and improves processing times, making Ethereum more efficient. The Starknet token (STRK) plays a key role in powering the network, allowing users to pay gas fees and participate in governance.
As the demand for scalable blockchain solutions continues to grow, Starknet is positioned to become a crucial part of the Ethereum ecosystem. With its advanced technology and increasing adoption, Starknet is poised to enhance Ethereum’s scalability and drive its widespread use across industries.