A comprehensive interpretation of the StarkNet ecosystem which projects deserve attention

Author: Kyle Liu, Investment Manager, Bing Ventures; Translation: Jinse Finance xiaozou

StarkNet is a layer 2 solution for scaling Ethereum using zkSTARKs. It alleviates the network congestion of Ethereum by increasing throughput and reducing transaction fees, and uses zero-knowledge proof technology to enhance data security and confidentiality.

Through StarkNet, developers can build, deploy and run high-performance smart contracts in a decentralized environment without worrying about expensive transaction fees and the security of smart contracts. These features make StarkNet particularly suitable for developing dApps with high performance and low transaction fees, such as dApps in the field of DeFi, NFT or GameFi.

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

All of this has contributed to the recent significant growth of the StarkNet ecosystem, as well as its TVL. In this article, we will understand the advantages and characteristics of StarkNet, share innovative projects in the ecosystem, and discuss the challenges and future prospects that the ecosystem may face.

1**、Advantages of StarkNet**

StarkNet uses zkSTARKs, the native programming language Cairo, and the Cairo virtual machine (VM), which has many unique advantages. Its custom development environment supports higher performance, better security, and richer features. Developers can use the Cairo language to write safe and reliable smart contracts, and enjoy the high throughput brought by StarkNet through the verification mechanism based on STARKs. Although there will be a learning curve for developers, these efforts will be well compensated.

StarkNet uses the tailor-made programming language Cairo and deploys the Cairo virtual machine. This approach is very different from other second-layer solutions that use existing components of Ethereum. While most other solutions focus on optimizing aspects of Ethereum, StarkWare focuses on optimizing its own ecosystem stack. While doing so loses the network effects of being fully compatible with Ethereum, there is no denying that this choice makes sense, especially given the network effects it has achieved around Cario and the escape velocity needed to scale.

In the future development, these technical features and innovations will provide continuous value. With the increasing importance of data security and privacy, the strong privacy protection capabilities provided by StarNet will attract more users and applications to the network. At the same time, StarkNet's scalability and decentralization features make it an effective solution for high throughput and security requirements. As the blockchain ecosystem develops and demands grow, StarkNet's superior technical features in terms of throughput, security, and privacy protection will provide significant value to its business, making it stand out from the competition.

2. Projects worthy of attention in the ecosystem

Central to the StarkNet dApp ecosystem is its ability to create high-performance, low-fee, privacy-preserving decentralized applications based on zero-knowledge proofs. While StarkNet can support a variety of use cases, its advantages of high throughput, low fees, and privacy protection make it particularly suitable for areas such as decentralized exchanges (DEX) and NFT marketplaces.

Below are some projects that we think are worth watching in this ecosystem.

(1)DeFifield

JediSwap is a permissionless, composable AMM created on Starknet by the Mesh Finance community. The project has been launched on the Starknet mainnet and currently has a total value locked (TVL) of approximately $5 million. They also received 150,000 STARK tokens from StarkWare. JediSwap is innovative and enables extremely fast, near-gas-free asset exchange in a trustless manner. JediSwap already has a certain market influence and has made great contributions to the StarkNet ecosystem in the DeFi field.

Mor****phine is an innovative DeFi lending protocol with two main use cases: passive lending and active lending. Passive lending allows users to provide liquidity and obtain income through different risk levels of junior tranches and senior tranches to cater to different risk preferences. Active lending, on the other hand, enables users to deploy sub-accounts where they can borrow up to 15 times their collateral, have access to LSD, LP, ERC4626, and set up automated operations. Morphine is highly innovative, offering multiple strategies and features for lenders and borrowers around the world. Morphine's flexibility and level of automation should be very attractive to DeFi users. Therefore, we believe it has the potential to succeed.

Or****biter Finance is a decentralized cross-rollup bridge for Ethereum native asset transfer. The Orbiter Bridge infrastructure allows for fast and cost-effective transfer of Ethereum assets across various rollups (like StarkNet, zkSync, etc.). The team is also developing zkProver, a middle layer that uses zero-knowledge technology to aggregate transactions, increasing cross-rollup transaction volume and TPS. This project will contribute to the development of StarkNet by enhancing interoperability and scalability.

DeversiFi is a decentralized exchange designed to enable faster and more secure transactions through StarkNet while maintaining a connection to Ethereum.

**（2）**NFT/Gaming/Metaverse

Realms (Bibliotheca DAO) started as a Loot project and later developed into a massively multiplayer blockchain game on StarkNet. The project is funded by the Starknet Foundation and will receive a total of 150,000 STRKs from the Early Adopter Grant.

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

The Ninth is a Metaverse game on StarkNet that offers a variety of gameplay such as land purchases and upgrades and staking. It balances game fun and technical factors, using 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. Using the native account abstraction on StarkNet, Agent X can provide multisig multi-signature security and the convenience of no mnemonic for users to use with peace of mind, with lower transaction fees and faster confirmation times.

Braavos is a friendly smart contract self-hosted wallet based on StarkNet. It is designed 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 several venture capital firms, the company has completed a seed round of financing. Its innovative blockchain-based approach helps reduce CO2 emissions and achieve carbon neutrality. It will have a real impact on environmental protection and sustainable development, which in turn will benefit the development of the StarkNet ecosystem.

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

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

Overall, the success of the StarkNet ecosystem so far lies in its technical strengths, developer support, and support for various use cases. For StarkNet to develop further, it needs extensive community support. If it can attract the attention and support of more developers, investors and users, its prospects will be even brighter.

3**, CHALLENGES AND FUTURE PROSPECTS**

Probably one of the biggest challenges and bottlenecks facing the StarkNet ecosystem is competition. Many other Layer 2 scaling solutions on the market are fighting StarNet and in some ways have an advantage over StarkNet. Therefore, continuous innovation and optimization are required to attract more developers and users.

The second potential problem is network effects. Since StarkNet is a relatively new technology, it will require a large influx of developers and users to build a strong network effect. Therefore, effective marketing and promotion efforts are necessary.

Another challenge StarkNet faces is ensuring the sustainability of its ecosystem. With a growing number of competitors and continuous advancement in technology, StarkNet needs to keep innovating and offering attractive features to keep users loyal and attractive. Additionally, StarkNet needs to develop solid relationships with developers and partners to facilitate the development and growth of the ecosystem.

Other challenges StarNet may face include:

Adoption may be limited by the Cairo language. The Cairo language is relatively new, and developers need to learn and adapt to this new programming language. This may create an additional 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 developing applications and finish quickly.

High throughput and low transaction costs are only beneficial for specific use cases. Although StarkNet demonstrates the advantages of high throughput and low transaction fees in some use cases, these advantages may not be applicable to all application scenarios. For some applications, especially those that do not need to process a large number of transactions, these advantages may not be obvious. Therefore, it remains to be seen whether StarkNet can achieve widespread adoption in various fields.

We believe that the development of StarkNet is driven by technology, and its business model has a clear positioning. The team prioritizes delivering solutions that actually meet user needs, rather than just chasing flashy new technology. We are also seeing more and more developers start using Cairo and STARK, recognizing their potential as scaling solutions. For example, some projects are developing zkEVM on StarkNet, such as Warp and Kakarot, showing the advantages of Cairo and StarkNet. In summary, we believe that StarkNet has greater potential in fields such as full-chain (FOC) games, contract wallets, cross-chain communication, and on-chain AI, because its technical features and innovations bring vital advantages to these fields.

In the field of FOC games, StarkNet's high performance and low cost make it an ideal choice. By bundling multiple L2 transactions into a single transaction on Ethereum, StarkNet can amortize transaction costs among other transactions within the same transaction bundle, reducing costs. In addition, StarkNet increases network speed, enables high throughput, and minimizes communication requirements. These features will help ensure the development efficiency of FOC games and better FOC game user experience.

In the field of contract wallets, StarkNet's native account abstraction allows contract wallets to provide security similar to hardware wallets, and supports encryption chips or modules on mobile phones to directly sign transactions. In addition, StarkNet's highly programmable signature verification can be optimized at the wallet layer through techniques such as signature transcription, enhancing performance and security.

The decentralized nature and security design of StarkNet make it a reliable solution for cross-chain communication. Using zero-knowledge proofs, StarkNet allows 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, and more data exchange and interoperability between chains can be promoted.

In the field of on-chain AI, the technical characteristics of StarkNet allow for on-chain verification and off-chain computation of generated proofs. This allows computationally intensive applications such as artificial intelligence and machine learning models to run on-chain without exposing sensitive data and model details. In addition, StarkNet's zero-knowledge proof capability can be used to verify the correctness of artificial intelligence calculations and enhance users' trust in the results. Overall, StarkNet will open up new possibilities for on-chain AI use cases in areas such as gaming, oracles, automated trading, anti-sybil attacks, KYC, and more.

In summary, we believe that as technology continues to evolve and innovate, the StarkNet ecosystem has the potential to stay ahead of the competition, but also needs to weather challenges to maintain sustainability and grow its user base. Through continuous innovation and close cooperation with developers and users, StarkNet will continue to develop and create more new use cases for Ethereum.