Acryptoinvest.news: Scalability remains a major challenge for blockchains, especially Ethereum. As the number of users and transactions on a blockchain network increases, speed slows and costs rise. This is where Ethereum scaling solutions like Starknet come into play. Starknet is designed to improve the speed and availability of Ethereum transactions.
In this article, we will look at what Starknet is and how it works.
What is Starknet?
Starknet is a reality rollup commonly known as zk-rollup that runs on the Ethereum network. Rolls process the majority of transactions outside of Ethereum and then provide proof of those transactions on Ethereum, reducing the load on the layer 1 blockchain and resulting in faster and cheaper transactions.
Starknet was developed by Israeli blockchain company StarkWare Industries to scale Ethereum. Starknet was fully launched in February 2022 as a permissionless Layer 2 network allowing anyone to build decentralized applications or decentralized applications on it. StarkWare has also developed another platform called StarkEx, which has been operational since June 2020, but it is a permissioned network tailored to the specific requirements of decentralized applications.
Founded in 2018, StarkWare is backed by prominent investors including Sequoia Capital, Paradigm and Coatue. The company was valued at $8 billion when it raised $75 million in Series B funding round. To date, StarkWare has raised a total of $261 million in funding.
How does Starknet work?
At Layer 2, Starknet processes transactions on its network and processes them on Ethereum for increased scalability. This is achieved by compressing thousands of transactions into a data structure known as a “proof”, which is then transmitted to Ethereum as a transaction. This significantly increases throughput, or the number of transactions processed per second, and significantly reduces the cost per transaction.
StarkNet uses a proprietary proof system called zk-STARK, or Scalable Transparent Zero-Knowledge Argument of Knowledge. This system verifies the correctness of transactions without revealing sensitive data, increasing privacy and security.
Starknet has two main components: Sequencer and Prover. Sequencers are responsible for executing transactions and proposing blocks. They can process significantly more transactions per second than Ethereum nodes. On the other hand, Provers provide a mathematical guarantee of the validity of block transactions, which are then finally settled in Ethereum.
Starknet will have its own token called STRK, which is expected to be unlocked in April 2024. StarkWare Deployed STRK Token on Ethereum in November 2022. The total supply of STRK tokens is ten billion and STRK will be used to cover transaction fees, management and staking on the Starknet network.