🌟 What is StarkNet?

StarkNet is a permissionless Layer 2 network developed by Israeli software company StarkWare. It operates as a ZK Rollup on Ethereum, enabling dApps to achieve larger computational scales with lower transaction costs using STARK proofs.

This network allows smart contracts to interact with other contracts deployed on the blockchain, enhancing composability between protocols.

🏛️ Decentralization emphasized

One of the major advantages of StarkNet is its strong emphasis on decentralization. STARK proofs allow more users to verify the entire blockchain with low hardware requirements, and the sequencer and prover of the permissionless layer ensure network censorship resistance.

The StarkNet Foundation devotes 50.1% of the initial token supply to ecosystem development, aiming to enhance StarkNet's decentralization by developing governance mechanisms and establishing decentralized ordering and proving.

This focus on decentralization attracts builders who prioritize constructing an open network aligned with the core principles of decentralized technologies, which we consider a positive driver for ecosystem development.

🔧 Rich tools for complex projects in StarkEx

The second value proposition of StarkNet lies in the availability of StarkEx, a heavy-duty Layer 2 scalability engine that supports large networks like the perpetual trading platform dYdX, Layer 2 scaling solution ImmutableX, and NFT game Sorare.

The StarkEx batch processor plays a crucial role in the sequencing of StarkNet, instilling developer confidence even as it launches in a semi-complete state after testing on dYdX and other platforms.

This proprietary engine is another reason why StarkNet is attractive to developers looking to build on the network. Complex applications can leverage the advantages of both StarkNet and StarkEx through vertical integration. StarkNet behaves more like a decentralized blockchain, providing a gas fee mechanism that offers more general functionality at the cost of throughput.

StarkEx, on the other hand, acts like a massive computer suitable for ubiquitous use cases like large-scale payments, trading, and massive NFT minting. As Web3 applications grow in complexity and functionality, it may be necessary to deploy parts of projects on different Rollups to optimize efficiency.

🚀 Boosting Ethereum

With the recent completion of the Ethereum merge, attention has shifted to other tracks in Vitalik's Ethereum roadmap. "The Surge" focuses on speed, aiming to achieve over 100,000 transactions per second through RollUps. Not just any RollUp, but a future-oriented, quantum-secure SNARKed/STARKed Ethereum.

Investors have been eager to find opportunities in ZK technology and have high expectations for Ethereum's scalability. StarkNet has undoubtedly benefited from increased investor interest, raising $100 million in its Series D funding at an $8 billion valuation led by Greenoaks Capital and Coatue, with participation from Tiger Global and others. CEO Uri Kolodny stated that the funds would be used for product and business development, engineering design, and ecosystem expansion. With ample resources, we anticipate StarkWare will ramp up business development to accelerate ecosystem growth and compete with other Layer 2 contenders like Polygon.

🧩 Adoption may be slowed by different programming languages

The biggest obstacle to adoption could be StarkNet's programming language, Cairo. Although powerful and optimized for verifiable computation, Cairo has a steeper learning curve, and currently, there are far fewer Cairo developers compared to Solidity developers.

If developers are not familiar with Cairo, they may encounter additional friction when joining StarkNet, potentially slowing down its adoption. Nevertheless, with the ZK movement gaining significant momentum, we expect to see more developers choosing Cairo.

The StarkWare team, led by Eli Ben Sasson and Uri Kolodny, is highly capable and provides excellent support to developers. Additionally, Nethermind's Nubia team has released a Solidity to Cairo transpiler, enabling developers to quickly deploy smart contracts written in Solidity on StarkNet.

🌍 Current and future state of the ecosystem

Since its mainnet launch in November 2021, the StarkNet ecosystem has evolved to include a wide range of dApps spanning various domains. Many infrastructure, wallets, tools, DeFi, GameFi, and even NFT projects are built on StarkNet. The ecosystem is expanding and becoming more vibrant, with great potential to mature into one of the frontrunners in the Layer 2 race. So far, StarkNet has been a relatively understated competitor in the Layer 2 race, focusing on laying the foundation for its nascent ecosystem. However, being understated does not imply incompetence. Clearly, we have seen the availability of StarkEx on StarkNet, and with its ample resources, StarkNet appears ready to enter a period of explosive growth and become a top contender in the scalability race.

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