Starknet launched STRK20 on Tuesday, a note-based privacy framework that lets users shield ERC-20 token balances and conduct private transfers and swaps on the Ethereum layer-2 network, with an encrypted viewing-key path for compliance.
Starknet rolled out STRK20, a note-based privacy layer for ERC-20 tokens, on Tuesday, allowing users to shield balances and conduct private transfers and swaps on the Ethereum layer-2 network.
The launch is the first phase of STRK20, a framework Starknet has been building since its v0.14.2 protocol upgrade in April, which introduced native in-protocol proof verification.
How STRK20 Works
STRK20 operates as a note-based privacy pool rather than a mixer. When a user shields an ERC-20 token, it is deposited into the pool and represented as an encrypted note. Private transfers spend existing notes and generate new ones. Each transfer is validated by a zero-knowledge proof confirming that the notes spent exist, belong to the spender, have not been double-spent, and that input and output amounts balance.
Starknet verifies the proof on-chain before updating pool state. Public observers can see encrypted notes and required protocol metadata, but cannot see the sender, receiver, amounts, or which balances were used, according to Starknet’s announcement.
Compliance Path Built In
STRK20 includes an encrypted viewing-key framework designed to address regulatory requirements. A third-party audit firm holds a viewing key that can be used to trace specific transaction history in response to a valid legal or regulatory request, without exposing uninvolved users.
The design mirrors the compliance disclosures built into protocols such as Aztec and Aleo: private by default, accountable when required.
The Competitive Landscape
Starknet’s launch arrives as on-chain transaction privacy is under scrutiny. Zcash’s Orchard shielded pool suffered a counterfeiting flaw disclosed last month that caused ZEC to lose more than half its value. A formal Ironwood upgrade to restore supply verification and add formal proof verification is now targeting a late-July mainnet date.
Aztec Network shipped Nyx v2 with private accounts governed by Ethereum keys earlier this year, and Sui launched a confidential-transfers feature in public beta this week. For the first time, three distinct L1/L2 networks are offering transaction-level privacy simultaneously.
STRK20 differs from those approaches in one respect: it targets existing ERC-20 assets rather than requiring users to move to a separate privacy-native asset. Any ERC-20 on Starknet can be shielded through the same pool without fragmenting liquidity.
What Is Not Yet Available
The current launch covers wallet-level shielding, private swaps, and private transfers. Broader DeFi integration, including private lending and borrowing, is not yet live. Starknet plans to open-source the wallet API and release an SDK for builders to integrate STRK20 into their own products in the next phase.
Cross-chain capabilities, which would allow users on Ethereum and Solana to access Starknet’s privacy pool without bridging manually, are also planned but not yet available. No adoption metrics, wallet counts, or shielded volume figures were disclosed at launch.
