StarkNet token release is imminent, how is its mainnet data performing?
Starknet is experiencing significant growth and positive trends, indicating that user engagement, adoption, and trust in it as a scalable and efficient Ethereum Layer 2 solution are continuously increasing.Author: stella@footprint.network
The "Blockchain Trilemma," or "Scalability Trilemma," highlights the challenges that blockchain platforms face in balancing security, decentralization, and scalability. Typically, blockchain architectures can effectively prioritize only two of these challenges at a time. For example, Ethereum prioritizes security and decentralization, leading to many challenges in scalability. However, the Ethereum community has recognized the importance of scalability and has been actively seeking solutions.
When discussing Ethereum's scaling solutions, we primarily focus on Layer 2 solutions, which aim to address the limitations of Layer 1. These Layer 2 solutions are designed to increase transaction throughput without compromising decentralization or security. Currently, there are several Ethereum Layer 2 solutions, including Rollups, State Channels, and Nested Blockchains.
Rollups
Rollups are a Layer 2 solution that aggregates (bundles) numerous transactions into a single transaction on Layer 1, saving costs for users by distributing transaction fees among participants within the bundle. There are two main types of Rollups: Optimistic Rollups and Zero-knowledge Rollups (ZK-Rollups). The former assumes that every transaction bundled is accurate and trustworthy (hence the name "optimistic"), directly entering the verification stage while introducing a challenger mechanism to ensure the validity of off-chain transactions; the latter enhances privacy and security using zero-knowledge proofs, a form of mathematical cryptography. Examples of Optimistic Rollups include Optimism, Arbitrum, and Boba Network, while applications of ZK-Rollups include Starknet, zkSync, and Scroll.
In this article, we will explore Starknet, an innovative Layer 2 solution based on ZK-Rollup technology.
Starknet: What is it? Why?
StarkWare was founded in January 2018 by Eli Ben-Sasson, co-founder of STARK and ZCash, with the aim of enhancing blockchain scalability and privacy. StarkWare achieves this by utilizing STARK technology (a cryptographic proof system) to deploy and verify zero-knowledge proofs.
One of StarkWare's notable products is Starknet, a permissionless ZK-Rollup solution that enables general-purpose computation. Currently, Starknet operates as a Layer 2 network on Ethereum and ensures the final Layer 1 security through STARK technology. Starknet achieves scalability by generating STARK proofs off-chain and then verifying them on-chain, thereby increasing transaction throughput and efficiency.
Positive Data Performance
Starknet is becoming increasingly popular within the StarkWare ecosystem and has also attracted broader community attention.
Source: Starknet Daily Active Accounts
The number of daily active accounts on Starknet has shown significant growth since March 2023. As of August 26, 2023, the number of daily active accounts reached 161,252, indicating a steady increase in user engagement. This upward trend reflects a growing interest in Starknet and its capabilities as a Layer 2 solution. It means that more users are actively participating in transactions, interactions, and decentralized applications (dApps) built on the Starknet ecosystem.
Notably, the platform peaked at 384,447 daily active accounts on July 28, 2023. The surge in user activity was primarily driven by the launch of a unique NFT called SPOK on the NFT marketplace Unframed on Starknet. Unframed introduced this unique NFT through an open and free minting event, generating significant interest and participation within the community. According to Footprint Analytics, up to 76.4% of the active accounts on that day interacted with the SPOK contract, further highlighting the enthusiasm of users participating in this event and the appeal of Starknet's NFT ecosystem.
Source: Starknet Daily Transactions & Transaction Fees
Since March 2023, Starknet's daily transaction volume has significantly increased, indicating a growing level of activity on the platform. As of August 26, 2023, the daily transaction volume reached 598,200, showcasing a notable rise in user interaction and participation. It is worth mentioning that the platform's daily transaction volume peaked at 560,400 on July 28, 2023, driven primarily by the launch of the SPOK NFT.
During this period, Starknet's transaction fees experienced fluctuations. On May 9, 2023, the platform's transaction fees peaked at 177.84 ETH. This indicates an increased demand for transaction processing, with users willing to pay higher fees for faster and more secure transactions. However, on August 26, 2023, transaction fees dropped to 73.36 ETH. The decrease in fees may be attributed to various factors, such as protocol optimizations, increased competition among validators, or changes in user behavior.
According to Footprint Analytics, as of August 26, 2023, Starknet's total transaction volume reached 32,788,400, with total transaction fees amounting to 8,963.15 ETH. The growth in Starknet's daily transaction volume and the fluctuations in transaction fees highlight the platform's ability to handle increased user activity while maintaining fee efficiency. As more users and dApps adopt Starknet, transaction volumes are expected to continue rising, and transaction fees may vary based on market dynamics and network optimizations.
Source: Starknet Daily Amount Bridged in ETH
Since March 2023, the daily cross-chain amount (in Ethereum) on Starknet has shown significant growth. On August 12, 2023, the daily cross-chain amount peaked at 12,570.13 ETH, coinciding with 7,397 active users. On August 26, 2023, the number of active users reached a peak of 15,110, with a daily cross-chain amount of 6,622.88 ETH. This substantial increase in cross-chain value indicates growing confidence in Starknet as a reliable and secure platform for Ethereum transfers and storage.
Key Features
As a Layer 2 solution, Starknet has several advantages:
Once the validity of bundled transactions is verified on Layer 1, Starknet immediately approves state updates, ensuring faster transaction times. This means transactions can be confirmed quickly and securely, enhancing the overall user experience.
Starknet utilizes Layer 1 data storage to ensure the security, censorship resistance, and decentralization of critical information. By storing off-chain state recovery data on Layer 1, Starknet ensures that user data is always protected and accessible.
Starknet provides users with efficient capital utilization and withdrawal flexibility. Users can withdraw funds from Layer 2 without delays, allowing for better control over their assets, which helps drive widespread adoption of the platform.
On the other hand, Starknet also has some limitations:
Starknet's native programming language, Cairo, may pose a barrier for dApp developers accustomed to languages like Solidity. While Starknet is working to achieve compatibility between Solidity and Cairo through the Warp transpiler, learning a new language may slow down the development pace of the ecosystem.
Starknet is not fully compatible with EVM, which means it needs to synchronize with EVM updates, potentially increasing the complexity of the development process.
The generation of validity proofs on Starknet requires specialized hardware, which may lead to centralized control and a limited number of participants capable of advancing the chain. This could increase the risk of malicious actors freezing Rollup states or censoring users, highlighting the need for careful consideration of network governance and security mechanisms.
Ecosystem
One of Starknet's main advantages is its ability to provide high throughput, low transaction costs, and privacy protection. These features make Starknet highly versatile, offering vast prospects for applications across various fields, including GameFi, NFTs, and DeFi.
Starknet positions itself as a significant supporter of full-chain gaming in the public chain space. The platform hosts several popular and engaging full-chain games, including LootRealms, GOL2, Isaac, Unstoppable Games, and more. These games have garnered widespread attention, becoming points of excitement and entertainment for users within the Starknet ecosystem.
Source: GOL2
Here are some noteworthy projects within the Starknet ecosystem. In the NFT space, there are projects like Starknet Quest, Starknet.id, AlmanacNFT, and Comoco; in the DeFi space, there are projects like JediSwap, Nostra, zkLend, Brine, and StarkEx. They showcase the innovation and development potential of the Starknet ecosystem.
$STARK and Starknet Airdrop
In November 2022, Starknet launched its native token $STARK on Ethereum. These tokens were initially distributed among shareholders, employees, and independent partner software developers. However, these tokens have a four-year lock-up period, with gradual releases planned to start in November 2023.
Due to the upcoming token airdrop, Starknet has garnered significant attention in the cryptocurrency community. Since July 2023, the highly anticipated airdrop has triggered a surge in user participation and activity on the platform.
Source: Starknet Monthly Amount Bridged in ETH
According to Footprint Analytics, since July 2023, the monthly cross-chain transaction volume of ETH on Starknet has shown significant growth. In March, there were 139,823 unique users, with a monthly cross-chain amount of 16,374.83 ETH. By August (as of August 26), the number of unique users on Starknet increased to 156,332. During this period, the monthly cross-chain amount surged to 148,316.71 ETH.
Starknet has gained attention for its inclusivity in distributing tokens to community members. If an airdrop occurs, it is expected to be allocated to individuals who actively participate in the Starknet ecosystem. This may include users who created Starknet wallets, linked assets to Starknet, used Starknet's dApps, and participated in Starknet governance.
Conclusion
In summary, Starknet is experiencing significant growth and positive trends, indicating that user engagement, adoption, and trust in its capabilities as a scalable and efficient Ethereum Layer 2 solution are continually increasing.
At the ETH Seoul conference in 2022, Vitalik Buterin predicted that ZK-rollups would outperform Optimistic Rollups in the Layer 2 scaling competition. With its promising features and capabilities, Starknet has the potential to shape the future of Ethereum and solidify its position as a leading ZK-rollup platform. The transformative impact that Starknet can bring to the blockchain ecosystem is indeed something we look forward to with great anticipation and enthusiasm.
