What is Starknet?

Starknet is a general-purpose ZK-Rollup developed by Starkware. Built on STARK proofs and the Cairo Virtual Machine (VM), Starknet enables developers to build scalable decentralized applications (dApps) without compromising Ethereum's security and decentralization.

Key Goals of Starknet:

• Scalability: Reduce transaction costs and increase throughput on Ethereum.
• Security: Retain Ethereum’s robust Layer-1 security.
• Developer-Friendly: Empower developers with tools to deploy scalable dApps efficiently.

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Key Entities in Starknet Ecosystem

1. StarkWare (Software Company):
   • A technology company based in Israel, StarkWare develops STARK-based scaling solutions, including Starknet and StarkEx.
2. StarkEx (Permissioned L2):
   • A customized ZK Rollup solution optimized for specific use cases such as NFT minting and trading. Projects must collaborate directly with StarkWare to use StarkEx.
3. StarkNet Foundation (Non-Profit Organization):
   • Provides funding, resources, and governance to foster community-driven growth for the Starknet ecosystem.

Core Components of Starknet Blockchain

1. Cairo Programming Language:
   • A high-level programming language tailored for Starknet. Cairo is inspired by Rust, offering an accessible environment for developers to write verifiable programs.
2. Cairo Virtual Machine (Cairo VM):
   • Compiler: Translates Cairo programs into Cairo Assembly (CASM), the executable format for Starknet.
   • Cairo VM: Executes CASM, processes transactions, and generates Execution Traces, essential for proof generation.
3. STARK-Based Proving System:
   • Prover: Generates STARK proofs off-chain based on Execution Traces.
   • Verifier: Verifies proofs on Ethereum, ensuring the validity of Starknet’s state transitions.
4. SHARP (Shared Prover):
   • SHARP optimizes costs by aggregating proofs from multiple projects using recursive techniques. This significantly reduces gas fees for on-chain verification.

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STRK Token: Use Cases and Tokenomics

STRK Use Cases:

• Governance: STRK holders participate in Starknet’s governance.
• Transaction Fees: Future use cases include paying gas fees and staking to decentralize Starknet's Sequencer.

STRK Tokenomics:

• Total Supply: 10 billion STRK.
• Allocation Breakdown:
  • StarkWare Investors: 17%
  • Core Contributors: 32.9%
  • Community Provisions: 9%
  • Community Rebates: 9%
  • Grants: 12%
  • Strategic Reserve: 10%
  • Donations: 2%
  • Treasury: 8.1%

Project Backers and Funding Rounds

Founders:

• Eli Ben-Sasson (Co-Founder & President): A prominent cryptographer and co-creator of STARK technology.
• Uri Kolodny (Co-Founder & CEO): Focuses on StarkWare’s scaling solutions.

Key Investors:
StarkNet has raised $261 million across five funding rounds from major investors, including:

• Seed Round (2018): Pantera Capital, Vitalik Buterin, Polychain.
• Series A (2018): Paradigm, Coinbase Ventures, Sequoia.
• Series B (2021): Paradigm, Multicoin Capital.
• Series C (2021): Sequoia Capital.
• Series D (2022): Coatue, GreenOaks.

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Starknet's Roadmap and Future Developments

Starknet’s focus lies in enhancing Ethereum scalability and decentralization while exploring new integrations with Bitcoin. Below is Starknet’s development roadmap:

Key Upgrades (2024):

1. v0.13.1: (Completed)
   • Integrated EIP-4844, reducing average gas fees below $0.01.
   • Starknet now processes over 100 ERC-20 transactions per second.
2. v0.13.2 (Planned: Q3 2024):
   • Parallel Transactions: Execute transactions more efficiently, reducing confirmation times.
   • Block Packing: Optimizes block creation without increasing L1 costs.
3. v0.13.3 (Planned: Q4 2024):
   • Focuses on Sequencer optimization by integrating Cairo natively.
   • Aims to achieve transaction confirmation times under 2 seconds.
4. v0.14 (2025):
   • Volition: Flexible data availability options between Starknet and Ethereum.
   • ZK Threads: A novel framework for ZK Sharding, enhancing blockspace scalability.
   • Mempool Optimization: Improves transaction organization, reducing rejection rates.

Starknet’s Bitcoin Integration: A Major Milestone

Starknet plans to expand beyond Ethereum and integrate with Bitcoin. Key initiatives include:

• Supporting OP_CAT soft fork to enable STARK proofs on Bitcoin.
• Launching a $1M fund to incentivize research and development for OP_CAT and STARK integration.

If successful, Starknet will become the first Layer 2 network to bridge Ethereum and Bitcoin seamlessly.

Strategic Partnerships

Starknet has established partnerships with leading players in the blockchain space, including:

• Infura, Alchemy, Ledger, and Consensys for infrastructure support.
• Chainlink: To provide secure oracle data for dApps on Starknet.
• The Graph: To enhance data indexing capabilities.

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Expert Insights and Market Position

Starknet’s integration of ZK-Rollup technology offers a significant advantage in Ethereum scaling:

• Performance: Starknet achieves substantial cost reduction and throughput optimization with SHARP and EIP-4844.
• Innovation: Starknet's plans to integrate with Bitcoin and enable ZK Threads place it at the forefront of blockchain scalability solutions.
• Community Growth: StarkNet Foundation’s initiatives will drive developer adoption, positioning Starknet for long-term growth.

Challenges:

• Starknet must compete with emerging ZK Rollups like zkSync and Polygon zkEVM.
• Adoption depends on developer and user onboarding facilitated through better tools, UX, and incentives.

Conclusion

Starknet represents a robust ZK-Rollup solution with ambitious goals of bridging Ethereum and Bitcoin. Its innovative architecture, developer-friendly Cairo programming, and strong investor backing position Starknet as a leader in blockchain scalability. As upgrades continue and the roadmap unfolds, Starknet’s STRK token offers significant long-term potential for investors, particularly in the evolving landscape of Layer 2 solutions.

Disclaimer:
This content is for informational purposes only and does not constitute financial or investment advice. Readers are encouraged to conduct their own research before making investment decisions.

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