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What Is Starkware?
Starkware is an Israel-based company building layer-two blockchains for Ethereum using zk-STARKs for computational security.
Invented by Starkware, zk-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge) are scalable and transparent cryptographic proofs that use lightweight hash functions to trustlessly verify computational integrity. Put simply, 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 is building two main products: StarkNet and StarkEx.
What Is StarkNet?
StarkNet is a permissionless decentralized layer-two blockchain based on zk-rollups. Like its L2 rivals, StarkNet executes transactions and relays the transaction data back to the Ethereum mainnet in batches, secured by STARK proofs. StarkNet thus benefits from the security and composability of Ethereum but can scale transactions on Ethereum thanks to its EVM-compatibility. The StarkNet Alpha went live on Ethereum mainnet on Nov. 29, 2021.
What Is StarkEx?
StarkEx is a layer-two scaling solution that is tailored for specific DApps, particularly DeFi trading applications like dYdX, DeversiFi, and Immutable X — an NFT blockchain. Broadly speaking, StarkEx is a permissioned version of StarkNet, a layer-two that is tailored-made to be used by protocols, while StarkNet is a decentralized zk-rollup that allows anyone to deploy their smart contracts on it without permission.
StarkEx can be used in three data availability modes currently: DApps can choose to 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 employs the Validium mode.
This is made possible by Cairo, the programming language used by Starkware products. Furthermore, Shared Prover (SHARP) technology ensures that gas cost between transactions in a batch can be shared, resulting in very low gas fees on Starkware.
Starkware vs Optimistic Rollups
Starkware is one of the main 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 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
Here are the differences between Starkware and zkSync, another zk-proof L2 solution:
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.
In a multichain future, it may 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 scaling the Ethereum blockchain. It was founded by Eli Ben-Sasson, the co-inventor of STARK proofs and a professor of computer science. Ben-Sasson was also involved in the foundation of ZCash, a privacy-focused cryptocurrency. Other co-founders include Alessandro Chiesa, Michael Riabzev and Uri Kolodny.
Starkware published the V1 version of StarkEx in June 2020, which was the first commercial release of STARK technology and was used by Deversifi. The V2 version followed in December 2020 and included Cairo-generated STARK proofs, ERC-721 support, and faster connectivity to the Ethereum mainnet. In the future, Starkware plans to launch StarkNet in several phases, which will see interoperability between different applications and a rollout at scale.
Starkware has thus far raised $165.5 million over several investment rounds. The seed round in May 2018 raised $6 million, followed by a Series A raise for $30.5 million with involvement from crypto VC funds like ConsenSys, Dragonfly Capital and several others. In June 2021, the company closed a $75 million Series B raise with involvement from 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 firm also counts Ethereum co-founder Vitalik Buterin as an investor.
Will There Be a Starkware STK Token and Airdrop?
Like zkSync, Starkware does not currently have a token. However, an article on CryptoBriefing into rumored token drops lists Starkware as one of the possibilities.
The article mentioned that the team "has not outright dismissed the idea. On the StarkWare Discord server, team members frequently respond to questions about a token with “no comment.” One of StarkWare’s key initiatives is to decentralize StarkNet, and a popular method for doing so is to issue a governance token."
Although there are no guarantees a Starkware token airdrop will occur, check out our guide explaining what crypto airdrops are and how you can participate in them.
How To Use StarkEx
You can use StarkEx L2 technology in a few different DeFi Dapps:
dYdX is a decentralized exchange for trading futures. Traders can engage in non-custodial futures trading directly from their wallet. Due to StarkEx, dYdX offers faster transaction speed, reduced trading fees and lower minimum trade sizes than usually possible on a DEX.
Using StarkEx, dYdX can also eliminate gas fees, making the exchange a legitimate alternative to centralized exchanges. The exchange’s focus is on derivatives and margin trading.
Immutable X is a layer-two scaling solution for NFTs on Ethereum. It is built on StarkEx, allowing it to do away with gas fees and increase the chain’s transaction speed.
Immutable X aims to position itself as the “NFT blockchain” of the future, which is home to different Web3 games and NFT-based decentralized applications. Immutable X currently supports blockchain games like Illuvium, Gods Unchained, Guild of Guardians and more.
DeversiFi is a decentralized exchange based on StarkEx. Users can swap tokens on the exchange, store them in their DeversiFi portfolio, and invest in different products for yield. Due to StarkEx technology, DeversiFi is also able to offer a gas-free market for token launches.
Sorare is a football-themed application featuring partnerships with 245 football clubs, including some of the biggest names in the world from Real Madrid, Liverpool to Paris Saint-Germain and more. It offers a global fantasy football game with NFT digital collectibles of trading cards that can be collected and traded without gas fees thanks to StarkEx.
How To Use StarkNet
StarkNet is still in its alpha stage and cannot be used like other layer-two solutions. However, you can still interact with StarkNet DApps — to do so, you will need a hot wallet. Currently, there are two wallet options available, and one on its way.
Argent X, the first StarkNet wallet
Braavos, a self-custodial solution
MetaMask, a popular wallet which will soon support StarkNet
Argent was the first DeFi wallet to deploy on StarkNet and has over 3.5 million transactions. Besides being a custody solution, it also offers vaults for users to earn yield on their crypto assets. Argent is backed by notable investors like Paradigm, Index Ventures and more.
How to use Argent
You can use Argent with a few simple steps:
1. Download Argent from the App Store or the 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 an integrated multimedia NFT reader. It is self-custodial and allows users to manage their crypto tokens and NFT all 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 note down the 12-word seed phrase
3. Send and receive tokens on the Alpha testnet. Braavos works just like other web wallets such as Metamask, so the UX should feel familiar for experienced DeFi users
Metamask announced a strategic partnership with Starkware, making it the first zk-L2 supported by the popular web wallet:
To use Starkware on Metamask, you have to install Metamask Flask and the Starknet Snap. However, Metamask recommends only developers to try out the new integration, which is still in Alpha and experiencing bugs. If you do want to try it, Meta provides a guide on how to install the Starknet Snap.
The Best StarkNet DApps
StarkNet is currently only available in testnet. However, according to @Astralytica, a Twitter account providing data and educational content on zk-rollups, more than 120 projects are currently being built 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 full documentation about the bridge here.
Orbiter Finance is a decentralized cross-rollup bridge with smart contracts only on the destination side, and is building out Ethereum’s future multi-rollup infrastructure. It is available both for Optimistic and zk-rollups. You can find out more about Orbiter Finance in the FAQ to Orbiter Finance.
LayerSwap is another token bridge for L2 chains like Starkware, zkSync, Optimism and Arbitrum. LayerSwap calls its bridge technology Bransfer and vows that Bransfer makes it “easy and safe to connect their 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 yields with its Alpha Road investment strategies and will offer NFTs as a financial utility. Users will be able to swap their crypto assets using the Alpharoad AMM.
mySwap was one of the first protocols to launch on StarkNet. It is an automated market maker (AMM) based decentralized exchange for token swaps, currently on the testnet.
JediSwap is another AMM-based DEX for token swaps and providing liquidity. Users can enter a liquidity pool (LP) by providing two assets or "zap" their tokens to be included into the pool in one click.
xBank Finance is a liquidity market 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. Liquidators enforce safety and functionality on xBank and Governors participate in the protocol’s governance process.
Yagi is a yield platform and a network of keepers automating protocol actions. Users can earn yields on their crypto assets by depositing them in vaults. By using automated protocol actions, users can participate in yield opportunities. Yagi allows for on-chain transparency of execution requirements and can be managed by building only two smart contract functions.
Starcombo is a tool that allows users to build yield-optimization strategies, termed ‘combos’ on different DeFi protocols. A combo allows users to access DeFi protocols and combine different investment strategies in a single transaction on Starknet. Starcombo is thus far only integrated with Jediswap and Myswap and charges no 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 features a fully decked-out marketplace. Users can buy or sell NFTs on the Starknet Alpha Testnet and create new NFTs by uploading visual assets. Aspect is also integrated with the Argent DeFi wallet.
Briq is a 3D block NFT protocol that is building NFTs that are composable and interoperable. Briqs are ‘NFT matter’ that can be used to create NFTs called ‘sets,’ which can be assembled, combined and torn down to be reused.
Bitmapbox is a 2D, on-chain block-building game on StarkNet. Users can use blocks to create an NFT on layer-1, or build new on-chain games. Blocks are ERC-1155 NFT standard and creations are ERC-721.
Mintsquare is a composable NFT marketplace. It is available on both StarkNet and zkSync 2.0. Mintsquare aims to become something like the “OpenSea of L2 zk-rollups” with its goal of “onboarding the next 100 million people to mint and trade NFT assets.” So far, Mintsquare allows the minting of new NFTs by uploading media from your desktop.
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