StarkNet - Ethereum's Scaling Solution
StarkNet - Ethereum's Scaling Solution
StarkNet is scaling Ethereum in 2022
Welcome to the alpha please newsletter. I curate alpha for you. That’s it; that’s the newsletter.
This alpha please newsletter is about StarkNet. It’s fast becoming one of the most exciting solutions for scaling Ethereum.
What’s to come?
Definitions
What is StarkNet
The Story so far
Overviews of StarkNet
Starknet Ecosystem
How Decentralised will StarkNet be?
Why should you care about StarkNet?
When can you move from ETH L1 to Starknet?
Wen Token? (don’t you dare just skip to this bit)
Key Resources
Definitions
There are some complicated tech underpinning StarkNet, so I will try and reduce everything down to the basics. (I am not smart btw, so this is to help me.)
A few “Explain it like I’m five” definitions:
ZK Rollups?
A ZK-Rollup is a smart contract that takes hundreds of transactions off the main blockchain and bundles them into a single transaction. It then sends a validity proof back to the main blockchain.
ZK rollups allow for the validation of blocks in a cheaper, faster, and privacy-focused manner, thereby allowing builders and developers to use Ethereum at scale.
The ZK bit?
In cryptography, zero knowledge proofs let you convince me that you know something, or have done something, without revealing to me what your secret thing was.
What is ZK-STARK?
STARK is a proof system. ZK-STARKs, invented by StarkWare (a company), enforce the integrity and privacy of computations on blockchains, using novel cryptographic proofs and modern algebra.
STARKs allow the underlying blockchains to move transactions to an off-chain prover, who then uses an on-chain verifier to verify these transactions.
Firstly, StarkWare is a company with two products:
StarkEx
Starknet
I am going to focus on StarkNet, but a quick TLDR on StarkEx.
What is StarkEx?
StarkEx is a standalone, customizable Layer-2 SAAS (Software as a Service) for exchanges that uses the STARK proof system in order to provide massive scaling.
Last week StarkEx did roughly 33% more transactions than Ethereum layer one.
It has been used by projects such as dydx, Sorare and Immutablex.
For context:
dydx generated $60 million in revenue over the last 30 days. The second most of any protocol in crypto (data from Token Terminal).
Sorare, the European fantasy soccer and NFT collectible platform, raised $680 million in their Series. It was a record for any Series B raise by a European company.
Immutablex, the first Layer 2 for NFTs on Ethereum, just got valued at $2.5 billion.
Big boy numbers.
What is StarkNet?
StarkNet is a permissionless decentralized Validity-Rollup (also known as a “ZK-Rollup”). It operates as an L2 network over Ethereum, enabling any dApp to achieve unlimited scale for its computation – without compromising Ethereum’s composability and security, thanks to StarkNet’s reliance on the safest and most scalable cryptographic proof system – STARK
Ok, there are lots of big words here.
But basically:
StarkNet is a general-purpose network where you can write and deploy your own smart contracts, interact with other contracts, and so on, just like Ethereum.
And let me just highlight this bit again because it’s ultimately why I wrote this newsletter:
“StarkNet allows any dApp to achieve unlimited scale for its computation, without compromising Ethereum’s composability and security.”
The StarkNet Story So Far
StarkNet is currently in Alpha
StarkNet Alpha was released to public testnet in June, and to Mainnet in November. By the time of the Mainnet deployment, StarkNet was already delivering general computation in an Ethereum-like state, which was widely thought to be years away.
While StarkNet currently delivers the compression magic they promised, at the moment, it’s far from being able to do so for enough dApps with enough throughput, and this may prove a source of frustration for developers in the short term.
The Network’s performance is now the top priority for development.
StarkNet say they now have hundreds of developers building on StarkNet, tens of dApps, and more than a dozen external teams developing tooling and infrastructure for the StarkNet ecosystem.
StarkWare to be valued at $6B
StarkWare raised $50 million in a Series C funding round back in November, and that put the firm’s valuation at $2 billion.
They are now looking to raise $100 million and triple their valuation to $6 billion. For context, ConsenSys, the leading Ethereum software company, was recently valued at $7 Billion.
The StarkWare Team
Giga brains. The undisputed experts in ZK technology.
Commentary on the team from Supercycled.
Great overviews of StarkNet
A few overview threads that are easy to digest.
Simao is coming in hot from ETH Denver and he’s got a very digestable breakdown of StarkNet.
A couple more deep dives from anons.
This dropped very recently from OxKanna.
The founders of Starkware spoke on the Delphi Podcast last October and delphi intern broke it down into these very handy notes.
Cairo
Cairo is the programming language for Starknet. It was developed in-house by StarkWare. It’s the first production-grade Turing complete von-Neumann verifier on Ethereum.
There is tooling to translate Solidity smart contracts into Cairo.
Mallows contrasts Cairo with Solidity (Ethereum’s programming language).
StarkNet ecosystem
Somehow Odin is managing to keep up with all of the projects building on StarkNet.
You can view this in detail on StarkNet’s new ecosystem’s website.
Here is an up to date list of projects you can test today.
AAVE holders have recently voted to deploy their v3 on StarkNet.
Argent X has the only browser compatible wallet so far for StarkNet & it has already hit a nice milestone.
Sneak peek at the Dope Wars game building on StarkNet.
And another game building on StarkNet.
A shower thought.
How Decentralised will StarkNet be?
It will be completely decentralised and they are currently working on that model. Here is the first draft.
Why should you care about StarkNet?
I know this is what you are really after. Let’s ask the the CT hive mind.
The Co-founder of Paradigm and partner at Sequioa added a lot of zeros…
Taken from Simao’s excellent thread.
Incredible gas savings.
Hot take: Liron from StarkNet goes as far to say that it’s a scalable L1, not an L2.
Very strong endorsement from Delphi Digital.
When Epolynya makes statements like this you should take note…
A nice data point from Diogo, but acknowledges Cairo is not as straight forward for devs.
When can you move from ETH L1 to Starknet?
Pretty soon. Orbiter have the first external bridge on test net currently.
But wen token?
You will find out when StarkWare tells you, anon.
The token will likely come once the decentralisation of StarkNet begins.
Key resources to learn more:
A one stop shop of everything to do with StarkNet.
For weekly updates nothing beats Swagtimus Prime’s StarkNet newsletter.
Follow Tom to get the latest monthly StarkNet updates.
Good intro podcast with Hasu.
Udi jumped on Twitter Spaces very recently with the co-founder and Head of Product at Starkware. It’s a great listen.
It really be like that.
And that’s your alpha.
We launched a Discord channel
It’s a space for all general crypto chat and will almost certainly contain alpha. It’s free to join, just click the image.
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Do your own research.