Comprehensive Interpretation of the StarkNet Ecosystem: Which Projects are Worth Paying Attention to

StarkNet Ecosystem Overview: Key Projects to Follow

Author: Kyle Liu, Investment Manager at Bing Ventures; Translation: Blockingxiaozou

StarkNet is a layer 2 solution for Ethereum that uses zkSTARKs. It alleviates network congestion on Ethereum by increasing throughput and decreasing transaction fees, and enhances data security and confidentiality through the use of zero-knowledge proof technology.

With StarkNet, developers can build, deploy, and run high-performance smart contracts in a decentralized environment without worrying about expensive transaction fees or smart contract security. These features make StarkNet especially suitable for developing high-performance, low-transaction-fee dApps in DeFi, NFT, or GameFi.

The StarkNet ecosystem also opens up many new possibilities for developers. With the flexibility and advanced features of the Cairo language, and the high throughput and customizability of StarkNet, developers can create innovative, high-performance, custom dApps on StarkNet. There are also many zkEVM projects in this ecosystem to choose from, and developers can deploy and run smart contracts in a more secure and efficient environment.

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All of these factors have contributed to the significant growth of the StarkNet ecosystem recently, with a significant increase in TVL. In this article, we will explore the advantages of StarkNet, share innovative projects in the ecosystem, and discuss the challenges and future prospects of the ecosystem.

1 Advantages of StarkNet

StarkNet uses zkSTARKs, the native programming language Cairo, and the Cairo virtual machine (VM), and has many unique advantages. Its customized development environment supports higher performance, better security, and richer features. Developers can write secure and reliable smart contracts in the Cairo language and enjoy the high throughput that StarkNet provides through a STARKs-based verification mechanism. Although there is a learning curve for developers, these efforts will be well rewarded.

StarkNet uses the customized programming language Cairo and deploys the Cairo VM. This approach is very different from other layer 2 solutions that use existing Ethereum components. Most other solutions focus on optimizing Ethereum, but StarkWare focuses on optimizing its own ecosystem stack. While this sacrifices network effects that are fully compatible with Ethereum, it is undeniable that this choice makes sense, especially given that it has achieved network effects around Cario and the escape velocity required for scaling.

In the future, these technological features and innovations will provide sustained value. As data security and privacy become increasingly significant, the powerful privacy protection capabilities offered by StarNet will attract more users and applications to the network. At the same time, the scalability and decentralized nature of StarkNet make it an effective solution for high-throughput and security needs. As the blockchain ecosystem develops and demand grows, StarkNet’s superior technological features in throughput, security, and privacy protection will provide significant value to its business, enabling it to stand out in the competition.

2. Projects of interest within the ecosystem

The core of the StarkNet dApp ecosystem is its ability to create high-performance, low-cost, privacy-protecting decentralized applications based on zero-knowledge proofs. While StarkNet can support a variety of use cases, its advantages in high throughput, low cost, and privacy protection make it particularly suitable for areas such as decentralized exchanges (DEXs) and NFT markets.

Here are some projects that we think are worth paying attention to in this ecosystem.

(1) DeFi area

JediSwap is a permissionless and composable AMM created by the Mesh Finance community on Starknet. The project has been released on the StarkNet mainnet and currently has a total locked value (TVL) of approximately $5 million. They also received 150,000 STARK tokens from StarkWare. JediSwap is innovative, enabling asset exchange in an extremely fast and nearly gas-free way without the need for trust. JediSwap has already had a significant impact on the StarkNet ecosystem in the DeFi area.

Mor phine is an innovative DeFi lending protocol with two main use cases: passive lending and active borrowing. Passive lending allows users to provide liquidity and earn returns through different risk levels of junior tranches and senior tranches to cater to different risk preferences. On the other hand, active borrowing allows users to deploy sub-accounts in which they can borrow up to 15 times the value of their collateral and access LSD, LP, ERC4626, and set up automatic operations. The innovation of Morphine provides various strategies and functions for lenders and borrowers worldwide. The flexibility and automation of Morphine should be very attractive to DeFi users. Therefore, we believe it has the potential for success.

Orbiter Finance is a decentralized cross-rollup bridge for transferring Ethereum native assets. The Orbiter Bridge infrastructure allows for fast and cost-efficient transfer of Ethereum assets across various rollups such as StarkNet and zkSync. The team is also developing zkProver, an intermediate layer that uses zero-knowledge technology to aggregate transactions, increasing cross-rollup transaction volume and TPS. The project will contribute to the development of StarkNet by enhancing interoperability and scalability.

DeversiFi is a decentralized exchange aimed at achieving faster, more secure trading through StarkNet while maintaining connections to Ethereum.

(2) NFT/Gaming/Metaverse

Realms (Bibliotheca DAO) started out as just a Loot project but has evolved into a large multiplayer blockchain game on StarkNet. The project is funded by the Starknet Foundation and will receive a total of 150,000 STRK from the Early Adopter Grant.

RYG.Labs is an NFT creative agency focused on creating interactive dynamic NFTs and providing NFT marketing solutions. It will act as a springboard for artists to enter the NFT space and promote the development of the NFT market on StarkNet.

The Ninth is a Metaverse game on StarkNet that offers various gameplay modes such as land purchase and upgrading and staking. It balances game fun and technical factors and uses StarkNet ZK Rollup to ensure the overall experience. It will contribute to the Metaverse and gaming ecosystem.

(3) Other innovative Web3 projects

Argent X is the first wallet built by Argent for StarkNet. Leveraging native account abstraction on StarkNet, Agent X can provide multisig security and convenience without the need for a mnemonic, with lower transaction fees and faster confirmation times.

Braavos is a user-friendly smart contract self-custody wallet based on StarkNet. It aims to provide a seamless experience for Web2 users and is currently available on Android, iOS, Chrome, Firefox, and many other browsers.

Carbonable is a carbon contribution tracking system based on StarkNet. With the participation of multiple venture capital firms, the company has completed its seed round of financing. Its blockchain-based innovative approach helps reduce carbon dioxide emissions and achieve carbon neutrality. It will have a real impact on environmental protection and sustainable development, which in turn will be beneficial to the development of the StarkNet ecosystem.

Dolven Labs is a Catalyst-based DAO ecosystem and a center for DeFi tools and innovative projects in the StarkNet ecosystem. The team has also developed projects such as StarkNet Social and StarkGuardians. Dolven Labs plays a crucial role in the StarkNet ecosystem by providing a project accelerator program and a set of permissionless tools that allow them to scale and achieve their goals.

Herodotus is building a storage proof cross-chain data access solution. It will allow smart contracts deployed on Starknet to access data on the current and historical Ethereum chains in a trustless manner. Herodotus’ solution is important for enhancing the interoperability between Ethereum and StarkNet. It will help to expand the capabilities of StarkNet and enhance the data accessibility of the entire blockchain ecosystem.

Overall, the success of the StarkNet ecosystem so far has been due to its technical advantages, developer support, and support for various use cases. Further development of StarkNet requires broad community support. If it can attract more attention and support from developers, investors, and users, its prospects will be even brighter.

3. Challenges and Future Prospects

One of the biggest challenges and bottlenecks that the StarkNet ecosystem may face is competition. Many other layer 2 scaling solutions on the market are also competing with StarNet and in some ways have more advantages than StarkNet. Therefore, constant innovation and optimization are needed to attract more developers and users.

The second potential issue is network effect. As StarkNet is a relatively new technology, a surge of developers and users is needed to establish a strong network effect. Therefore, effective marketing and promotion are necessary.

Another challenge facing StarkNet is ensuring the sustainability of its ecosystem. With more and more competitors and the constant advancement of technology, StarkNet needs to constantly innovate and provide attractive features to maintain user loyalty and attractiveness. In addition, StarkNet needs to establish strong relationships with developers and partners to promote the development and growth of the ecosystem.

Other challenges that StarNet may face include:

Adoption may be limited by the constraints of the Cairo language. Cairo is relatively new, and developers need to learn and adapt to this new programming language. This may add an extra learning curve for many developers, limiting their ability to participate in the StarkNet ecosystem. In contrast, the Ethereum EVM has a larger developer community, making it easier for developers to start building applications and complete them quickly.

High throughput and low transaction costs are only advantageous for specific use cases. Although StarkNet demonstrates the advantage of high throughput and low transaction fees in certain use cases, these advantages may not apply to all application scenarios. For some applications, especially those that do not require a large number of transactions, these advantages may not be obvious. Therefore, whether StarkNet can be widely adopted in various fields remains to be seen.

We believe that the development of StarkNet is technology-driven and has a clear positioning of its business model. The team prioritizes providing solutions that truly meet user needs, rather than pursuing fancy new technology. We also see more and more developers starting to use Cairo and STARK, realizing their potential as scaling solutions. For example, some projects are developing zkEVM on StarkNet, such as Warp and Kakarot, demonstrating the advantages of Cairo and StarkNet. In summary, we believe that StarkNet has greater potential in the field of full-chain (FOC) games, contract wallets, cross-chain communication, and on-chain AI, as its technical characteristics and innovation bring crucial advantages to these fields.

In the field of FOC games, the high performance and low cost of StarkNet make it an ideal choice. By bundling multiple L2 transactions into one transaction on Ethereum, StarkNet can share the transaction costs among other transactions in the same transaction package, thereby reducing costs. In addition, StarkNet improves network speed, achieves high throughput, and minimizes communication requirements. These features will help ensure the development efficiency and better user experience of FOC games.

In the field of contract wallets, the native account abstraction of StarkNet allows contract wallets to provide security similar to that of hardware wallets, supporting direct signature of transactions by encryption chips or modules on mobile phones. In addition, StarkNet’s highly programmable signature verification can optimize performance and security at the wallet layer through technologies such as signature transcription.

StarkNet’s decentralized nature and secure design make it a reliable solution for cross-chain communication. Using zero-knowledge proofs, StarkNet allows for verification and proof without revealing transaction details, ensuring data privacy and security. Through StarkNet, the credibility and security of cross-chain communication can be improved, promoting more data exchange and interoperability between chains.

In the field of on-chain AI, StarkNet’s technical features allow for on-chain verification of generated proofs and off-chain computation. This enables computationally intensive applications such as artificial intelligence and machine learning models to run on-chain, while maintaining the convenience of not exposing sensitive data and model details. In addition, StarkNet’s zero-knowledge proof capability can be used to verify the correctness of AI computations, enhancing user trust in the results. Overall, StarkNet will open up new possibilities for on-chain AI use cases in gaming, oracles, automated trading, anti-sybil attacks, KYC, and more.

In conclusion, we believe that with continued technological development and innovation, the StarkNet ecosystem has the potential to maintain a leading position in the competition, but it also needs to withstand challenges to maintain sustainability and expand its user base. Through continuous innovation and close collaboration with developers and users, StarkNet will continue to evolve and create more new use cases for Ethereum.

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