With its ecosystem data hitting new highs, is Starknet, which strongly promotes privacy and the Bitcoin narrative, on the verge of a breakout?

Author: Pink Brains

Compiled by: Tim, PANews

Starknet is in the early stages of a Solana-style rebound.

This L2 is not mentioned much, but it uses unique technology and focuses on creating highly available products.

• Since July, DeFi TVL has tripled, currently reaching approximately $300 million, nearing its all-time high.
• Stablecoin market capitalization hit a record high of $154 million.
• It ranked second in net capital inflows over the past three months, with a net inflow of $584 million.
• Active accounts are on the rise, reaching 50,000 to 60,000 per day.

Why has Starknet made such progress?

First, Starknet did not simply copy Ethereum's existing solutions, but instead built its DeFi ecosystem from scratch.

STRK native staking functionality: the first L2 token with a viable application scenario. Through Endur.fi 's LST products, an annualized yield of approximately 7% can be achieved. Over 1 billion STRK have been staked within a year (approximately 22% of the circulating supply, a 120% increase in the past three months).

Native BTC staking functionality: A dual-token staking mechanism was implemented for the first time at the Starknet consensus layer. Within just one month of its launch, the staked amount reached 1791 BTC, worth approximately $166 million.

The staking feature is now available on wallets such as Ready, Braavos, and Xverse.

Anchorage, an institutional-grade custody platform, also supports BTC staking on the Starknet network.

Starknet is one of the most liquid Bitcoin Layer 2 networks and is at the core of the BTCFi narrative.

It supports cross-chain BTC transfers from Bitcoin, Ethereum, and other Layer 2 networks, BTC staking, and out-of-the-box DeFi suites.

• Re7 Capital: Offers institutional-grade strategies, including mRe7 Yields (stablecoin yields) and mRe7 Bitcoin (Bitcoin yields), tokenized through the Midas RWA platform.
• Endur.fi: The largest LST project on Starknet. It has locked 60 million STRK (7.75% annualized yield) and 340 BTC.
• Vesu offers BTC-collateralized lending and revolving strategies. Users can deposit wBTC, tBTC, LBTC, and SolvBTC to earn an annualized deposit interest rate of up to 2.5%, and borrow USDT and USDC at an annualized borrowing rate of approximately 2.8%. Total deposits have now exceeded $60 million, and total borrowings have reached $19 million.
• Extended, Avnu, and Ekubo Protocol: Focused on BTC trading and liquidity. Ekubo is the largest automated market maker DEX on Starknet, featuring Uni v4-like scalability, support for dollar-cost averaging, and an upcoming limit order mode.
• Uncap and Opus: Allow users to borrow Starknet's native stablecoin by using BTC as collateral.
• 0D Finance, Troves, and Starknet Earn: Providing Convenient One-Click DeFi Strategies

Starknet is also improving its interoperability.

Starknet will support LayerZero, Stargate Finance, native USDC, CCTP v2, and the NEAR interaction mechanism in December.

This could accelerate the inflow of stablecoins and facilitate cross-chain transactions between assets such as STRK, ZEC, BTC, and SOL.

Starknet is pushing the privacy narrative very hard.

StarkWare's ZK stack powers three of the top ten perpetual contract DEXs, all of which are privacy-focused perpetual contract DEXs. It currently faces fierce competition from Hyperliquid and Aster.

• edgeX (built on Starknet): 30-day perpetual contract trading volume reaches $170 billion
• Paradex (independent blockchain): 30-day perpetual contract trading volume reached $26 billion, with a total transaction value (TVL) of $144 million.
• Extended (Rollup expansion plan): 30-day perpetual contract trading volume reached $28 billion, with a TVL of $99 million.

Indeed, as privacy becomes a key feature, privacy-focused DEXs built on StarkWare and Starknet technologies have greater development potential. Starknet's zero-knowledge proof technology not only enhances transaction privacy protection but also balances scalability and security, laying the foundation for the long-term value of DeFi.

Ethereum + Bitcoin + Zcash = Starknet

Ztarknet is an L2 network based on Starknet, designed specifically for Zcash. It runs high-throughput applications on CairoVM and uses STARK proofs to settle state to the Zcash mainnet.

It adds basic layer privacy features, enabling ZEC to achieve scalable programmability and post-quantum security.

Yes, StarkWare is also developing Zoro, a Zcash light client that utilizes STARK proofs and aims to compress the Zcash chain verification process into concise, verifiable proofs.

The Starknet ecosystem will fully support Zcash. This means that Zcash will be able to leverage Starknet's high-performance infrastructure, including the Cairo programming language and STARK proof technology, to enhance scalability, privacy, and programmability, while maintaining interoperability with the Ethereum ecosystem.

Starknet is designed to be quantum resistant.

Vitalik recently warned that quantum computers could break the elliptic curve cryptography that protects Bitcoin and Ethereum within the next four years.

• Starknet uses STARK proofs. Unlike ECC, which relies on large number factorization (easily broken by quantum computers), STARKs are based on collision-resistant hash functions, which quantum computers cannot quickly crack. Mathematically, Starknet possesses post-quantum security.
• In most Layer 1 networks, a private key is equivalent to a wallet. However, Starknet's smart contract wallet mechanism allows its security to be directly enhanced through protocol upgrades without transferring funds, which is fundamentally different from EOA wallets.
• Quantum-secure signatures are typically large in size, but Starknet can compress them into proofs in batches, enabling Bitcoin or Ethereum networks to verify them at lower gas costs while reducing the processing load on the base layer.

In short: Starknet is at the crossroads of the most critical paths in the crypto industry.

The technology is ready; we await market validation.