Starknet Token (STRK): What is Starknet? How Does it Work?

What is Starknet?

Starknet is one of the prominent layer-2 solutions developed on the Ethereum blockchain to enhance its scalability. It is a permissionless zero knowledge proof (ZK-proof) rollup that processes transactions outside of Ethereum and then submits the proof of those transactions to the Ethereum mainnet.

Starknet reduces the load of transaction processing on Ethereum by processing them off-chain while ensuring the security of the transactions. With its exceptional contribution to Ethereum scalability, it emerged to be one of the top layer 2 crypto projects in the industry.

How Does Starknet Work?

Ethereum blockchain offers a secure environment to process transactions. As a layer2 network, Starknet achieves scalability by processing transactions off-chain and then submitting their proof to the Ethereum blockchain.

Starknet takes thousands of transactions off Ethereum and bundles them before processing. After validating the transactions, Starknet submits one single object called “Proof” to Ethereum as a transaction. As a result, Starknet helps Ethereum in processing thousands of transactions in batches. This enhances the scalability of Ethereum to a large extent, which further results in decreased gas fees.

The Strakenet layer2 works based on ZK-STARK technology, which is also called Zero Knowledge Scalable Transparent Argument of Knowledge. The technology not only ensures that the transactions are processed at a faster rate but also prioritizes security and privacy of the transactions.

While the functionality of Starkent layer2 is not much different from other ZK rollups, they differ when it comes to their compatibility with EVM. Despite being built on top of the Ethereum blockchain, Starknet is not compatible with Ethereum Virtual Machine. If developers would like to build something on Starknet, they need to use a different programming language called “Cairo”. It is Straknet’s own programming language.

Two Major Components of Starknet Architecture

As we discussed, Starknet processes thousands of transactions at once and reduces the load on the Ethereum blockchain. While we had a rough idea on how the Starknet works, we will now discuss two major components of the Starknet architecture. These are like the pillars behind Starkent that are making its functionalities possible.

Sequencer

Sequencers are one of the first core components of the Starkent architecture. They are more like powerful computers that are more capable in executing transactions compared to Ethereum nodes or validators. Sequencers can execute more transactions per second than Ethereum, which is the main reason behind how Starknet is capable of enhancing scalability.

Sequencers reject and stop invalid transactions and transfer valid transactions forward. After that they propose blocks and all the validated transactions fill a new block, which will then be approved by the Sequencer. When the block is approved by a complete network of Sequencers, it will be sent to “Provers”.

Prover

The responsibility of Provers is to provide a guarantee, proving that the transactions are valid. They trace each transaction in the block forwarded by Sequencers and have what is called “Execution Trace”, which is the data of how each transaction was executed. Any single piece of invalid data will contaminate the whole data and processing of the block will be stopped.

However, if the whole data in the block is valid without any issues, the Provers take up random samples from the complete data. The collection of this random data, taken from the whole date of valid transactions, is called “proof”. This is the mathematical guarantee to prove that all the transactions in that block are valid and is finally sent to the Ethereum blockchain.

Who is Behind Starknet?

The Starknet layer-2 scaling solution was developed by an Israeli blockchain firm, StarkWare Industries. It is safe to say that Starknet is one of the first-movers among the layer-2 scaling solutions. The Starknet scaling solution completed its launch in February 2022 and was ready to build decentralized applications on top of it.

In addition to Starknet, the StarkeWare Industries company also launched StarkEx way before the Starknet, in June 2020. However, it was a permissioned network and was used for specific dApp development. Combining all the projects of StarkWare Industries, the company handled around $1.2 trillion worth of cumulative trading and $832 million of TVL as of February 2024.

When Was Staknet Token (STRK) Launched?

Even though the Starknet project was launched in February 2022, its native STRK token was launched after 2 years. The Starknet token airdrop was launched on February 20, 2024, distributing more than more than 700 million STRK tokens.

The STRK token has a total supply of 10 billion tokens and has a starting price of around $2.3877. As with the case of any other crypto airdrop, the STRK token price fell after witnessing a huge price spike right after the airdrop.

Starknet token has innumerable use cases when it comes to enabling the functionalities of the Starknet layer2 network. One of the major ones among them is allowing users to pay gas fees for their transactions in terms of STRK tokens. Additionally, STRK token holders can participate in the governance of the layer2 network. Either the token holders can directly participate or they can delegate their votes to their reliable representatives of the network.