What is StarkWare?

Introduction

Blockchain technology has revolutionized many industries, including finance, gaming, and supply chain management, by enabling secure and decentralized transactions. However, one of the main challenges facing blockchain networks is scalability - the ability to process large numbers of transactions quickly and efficiently. This scalability issue has led to high fees and slow transaction times on many popular blockchain networks. Addressing this challenge requires innovative solutions, and StarkWare is a company that has developed a range of cutting-edge technologies to help solve these problems.

This article explores what StarkWare is, its history, and its range of products, including ZK-STARK, StarkEx, and StarkNet. It also examines the applications and use cases of StarkWare, the StarkNet Token, and the StarkNet Foundation.

Understanding StarkWare

Source: Starkware

Starkware is a tech company that specializes in developing cryptographic-proof systems using ZK-STARK technology to improve the scalability, security, and privacy of blockchains. Their objective is to construct a layer-2 blockchain on Ethereum using their technology, allowing for faster and more secure transactions while still protecting user privacy.

By using ZK-STARK technology, Starkware enables one party to prove that it possesses particular information without revealing that information, leading to increased trust and security in blockchain transactions. Additionally, the company offers scaling solutions that provide users with a secure, fast, and seamless experience.

Partnerships

StarkWare’s partnerships and collaborations with various companies and organizations are significant in showcasing the potential impact of its technology on the blockchain and cryptography ecosystems. Notably, its collaboration with Ethereum aims to provide a Layer 2 scaling solution that improves the network’s throughput and scalability while reducing transaction costs. Additionally, its partnership with Chainlink aims to integrate off-chain data solutions into its own products, while collaborations with other entities like ConsenSys, dYdX, and 0x demonstrate StarkWare’s commitment to working with others to achieve its goals.

StarkWare has also formed a significant collaboration with Immutable X, which specializes in non-fungible token (NFT) scaling solutions on the Ethereum network as a Layer 2 solution. The collaboration between StarkWare and Immutable X aims to provide a faster, cheaper, and more scalable solution for NFT trading and transactions on the Ethereum network.

History of StarkWare

StarkWare was founded in 2018 by a team of experts in cryptography, computer science, and engineering. The team includes co-founders Prof. Eli Ben-Sasson, Prof. Alessandro Chiesa, Michael Riabzev, and Uri Kolodny, who have backgrounds in academia and industry. The company’s programming language, Cairo, which was introduced in 2020, is a significant milestone in its development. StarkWare’s first technology offering was the StarkEx, a proprietary scaling engine that was launched on Ethereum in June 2020. Later in November 2021, StarkNet’s Alpha was launched on Mainnet, further expanding the company’s reach in the blockchain space.

Additionally, StarkWare has received significant funding from investors and partners like Sequoia Capital, Paradigm, and Coinbase Ventures and its estimated value has surged from $2 billion to $8 billion between November 2021 and May 2022. The company has remained committed to developing innovative technologies to enhance the scalability, privacy, and security of blockchains.

What is ZK-STARK?

Source: StarkWare

STARKs (Scalable Transparent ARguments of Knowledge) is a cryptographic proof system that allows for the efficient proving and verification of computations. They are designed to improve the scalability and privacy of blockchains by enabling large computations to be done off-chain, where they are cheaper, and then verified on-chain with a single STARK proof. STARKs are post-quantum secure and resistant to attacks by quantum computers, making them a promising solution for blockchain scalability and privacy issues.

ZK-STARKs (Zero-Knowledge Scalable Transparent ARguments of Knowledge), invented by StarkWare, are a type of STARK that enforces the integrity and privacy of computations on blockchains. They allow blockchains to move computations to a single off-chain STARK prover and then verify the integrity of those computations using an on-chain STARK Verifier. This enables the batch processing of thousands of transactions at once, reducing the load on the main blockchain and lowering gas costs. ZK-STARKs are transparent and do not rely on a trusted setup, making them more secure and decentralized than other zero-knowledge proof systems. On the StarkWare platform, “STARK” and “ZK-STARK” are used interchangeably.

StarkWare Products

StarkWare offers two primary products as scaling solutions, namely StarkEx and StarkNet, both of which are powered by Cairo, a programming language developed by the company.

Cairo

Source: Cairo

Cairo is a high-level programming language that enables the creation of STARK-provable programs for general computation, which powers the StarkEx platform for scaling applications on the Ethereum Mainnet. It is used by various projects, including dYdX, Sorare, Immutable X, rhino.fi, Celer, Apeworx, and Canvas. Additionally, Cairo is the native smart contract language for StarkNet, a decentralized Validity-Rollup that aims to improve the scalability and privacy of Ethereum. By providing a more efficient way to verify transactions on the blockchain, Cairo and StarkNet offer a promising solution to the challenges facing the Ethereum network.

StarkEx

Source: StarkWare

StarkWare’s StarkEx is a Layer-2 scalability engine live on the Ethereum Mainnet that provides a framework for creating permissioned application-specific scaling solutions with cheap off-chain computation using STARK proofs. It supports a range of use cases, such as NFT minting and trading, derivative trading, AMMs, spot trading, payments, and DeFi pooling, with a toolbox of useful application flows for scaling various applications. Projects like dYdX, Immutable, Sorare, and Celer have deployed their applications on StarkEx, and StarkWare continues to add more application flows to meet the needs of its customers and the market.

StarkNet

Source: StarkNet

StarkNet is a permissionless decentralized Validity-Rollup operating as an L2 network over Ethereum, enabling any dApp to achieve unlimited scale for its computation without compromising Ethereum’s composability and security. It supports scale while preserving the security of L1 Ethereum by producing STARK proofs off-chain and then verifying those proofs on-chain. Developers can easily deploy any business logic using Starknet Contracts, and StarkNet provides Ethereum-level composability.

StarkNet is a layer 2 network where any user or developer can deploy smart contracts developed in the Cairo language, and StarkNet sequencers batch transactions and send them to be processed and proved. A large developer community is deeply engaged with the StarkNet ecosystem, building apps, tools, and infrastructure.

Difference between StarkEx and StarkNet

StarkEx and StarkNet are both STARK-based scaling solutions for Ethereum, but they have different operating requirements and interoperability patterns. StarkEx is more suitable for self-contained applications that fit into the APIs provided by StarkEx, while StarkNet is more suitable for protocols that require synchronous interaction with other protocols or have needs beyond what StarkEx offers. Both solutions provide scalability, low gas costs, and security, but the choice between them depends on the specific needs of the application or protocol.

Applications and Use Cases of StarkWare

StarkWare’s STARK technology has enabled the scaling of various use cases on the blockchain, including mass-minting of NFTs, perpetual contracts trading, spot trading, payments, DeFi strategies, fair voting, novel AMM designs, and data management. With the help of the Turing-complete programming language Cairo, StarkWare can quickly deploy solutions for any use case and handle any project size. StarkWare’s solutions, StarkNet and StarkEx, have settled over $100B in cumulative trading and tens of millions of transactions on Mainnet since June 2020.

In addition to the various use cases, StarkWare’s solutions have found applications in several industries. For example, the blockchain fantasy soccer game Sorare uses StarkWare’s technology to mass-mint NFTs at an affordable price, saving millions of dollars in gas fees. DeFi platform DeversiFi uses StarkEx to settle trades at a better price than users signed, decrease minimum order sizes, and keep trade history private for traders. Additionally, dYdX uses StarkEx to power its perpetual contracts, handling billions of dollars in trades daily and growing its business by 500X. Other industries, such as supply chain monitoring, medical information management, real estate record keeping, and music royalty tracking, can also benefit from StarkWare’s solutions.

What is StarkNet Token (STRK)?

StarkWare has recently deployed a native token, the StarkNet Token (STRK), on the Ethereum mainnet. The StarkNet Token plays an essential role in the functioning and development of the StarkNet ecosystem, allowing users to determine its values and strategic direction as well as maintain and secure its operations. The token will be used to further decentralize the ecosystem, allowing users to vote, stake, and pay fees.

However, the company has warned potential investors to beware of scams, as the tokens are not currently being offered for sale. It will take time for the Foundation to determine the mechanism for distributing its tokens. Tokens held by StarkWare shareholders, employees, and independent partner software developers are locked for a four-year period, with a gradual release starting after one year. It is important to note that the StarkNet Token is the native token of the StarkNet ecosystem, and it does not represent equity in StarkWare or any participation rights in the company.

The StarkNet Foundation

The StarkNet Foundation has been launched to facilitate the building of StarkNet as a permissionless, decentralized Validity Rollup. The Foundation is dedicated to supporting a thriving StarkNet and is led by a strong interdisciplinary board of seven members, each with diverse backgrounds and expertise. The Foundation has been set up to fulfill the vision of StarkNet’s decentralization proposal and to advance the shared technology that is StarkNet as a public good for all, maintained as such for years to come.

The Foundation’s priorities include fostering the community of StarkNet users, expanding the community by educating about StarkNet and its technology, overseeing the continued development of the network and advancing research, and furthering StarkNet’s decentralization by developing governance mechanisms and instituting decentralized sequencing and proving. The Foundation launches with 50.1% of the initial token supply to ensure the network’s resources are effectively deployed towards its goals. The board members bring balance, independence, and a multidisciplinary range of skills to the table, and the Foundation is an independent entity that will support those building, using, and maintaining a public good, namely the StarkNet Protocol.

STRK Tokenomics

Source: StarkWare Medium Platform

The StarkNet Token’s initial circulating supply is 10 billion, with a dynamic supply increasing over time based on the community’s decision. The token allocation includes 17% for StarkWare investors, 32.9% for core contributors, and 50.1% granted by StarkWare to the Foundation for community provisions, community rebates, grants for research and work, strategic reserve, donations, and an unallocated treasury. To align the interests of core contributors and investors with the StarkNet community, a 4-year lock-up period with linear release and a one-year cliff is imposed on all tokens allocated to them.

Merits of using StarkWare

• High scalability, enabling thousands of transactions per second
• Privacy through the use of zero-knowledge proofs
• Cost-effective by reducing gas fees
• Flexible integration with various blockchain platforms
• Interoperability for cross-chain transactions
• High-level security through advanced cryptographic algorithms.

Demerits of using StarkWare

• Centralization risk due to a concentration of transaction processing power.
• Complexity of implementation requiring specialized technical expertise and knowledge.
• Slow adoption due to a lack of understanding or awareness among potential users.
• Limitations on transaction types, particularly those requiring high levels of transparency.

Prospects for StarkWare

StarkWare is a leading provider of zero-knowledge proof solutions that enable high-throughput and low-cost computation of complex cryptographic algorithms. The company’s innovative technology has already made a significant impact in the blockchain space, and its prospects for the future are bright. StarkWare’s technology has the potential to address some of the most pressing challenges facing the blockchain industry, such as scalability and data privacy. As the industry continues to grow and evolve, there is likely to be a significant demand for solutions that can enable faster, cheaper, and more secure transactions.

In addition, the potential use cases for StarkWare’s technology extend beyond the blockchain space, such as in AI and machine learning. As these industries continue to grow and generate more data, the need for secure and private computation will only increase. Overall, the future looks promising for StarkWare. By continuing to innovate and collaborate with other companies and organizations, StarkWare is well-positioned to remain at the forefront of zero-knowledge proof technology and drive its adoption in new and exciting ways.

Conclusion

StarkWare is a tech company that specializes in developing cryptographic-proof systems using ZK-STARK technology to improve the scalability, security, and privacy of blockchains. With the use of ZK-STARKs, StarkWare enables one party to prove that it possesses particular information without revealing that information, leading to increased trust and security in blockchain transactions. Their products, including Cairo, StarkEx, and StarkNet, offer promising solutions to the challenges facing the Ethereum network, improving scalability, privacy, and security while reducing costs.

With significant funding from investors and partners and a talented team of experts, StarkWare is poised to continue revolutionizing the blockchain space and driving the evolution of blockchain and beyond.