Why Can StarkNet Become A Dark Horse In The Layer 2 Race?

With sufficient resources, it is expected that StarkWare will start to ramp up business development to accelerate the growth of its ecosystem to compete with another layer 2 competitors such as Polygon.

What is StarkNet?

StarkNet is a permission-free layer 2 networks developed by Israeli software company StarkWare. It runs as a ZK Rollup on Ethereum, helping dApps use STARK proofs to achieve greater computational scale at lower transaction costs. The network allows smart contracts to interact with other contracts deployed on the blockchain, increasing composability between protocols.

All transactions on StarkNet are periodically batched (or rolled up) and given a ZK-STARK proof that is then validated on Ethereum. Essentially, thousands of transactions are sent, verified, and batched off-chain on StarkNet, which saves gas and is far more scalable.

Once the ZK-STARK proof is generated for a batch, Ethereum can validate the proof to make sure the batch of transactions is valid and then proceed to update all wallets included with their new balances.

This process saves Ethereum from having to verify the validity of every single transaction on-chain, which takes a great deal of computing power and leads to high gas fees and a clogged network.

Because it isn’t a “zkEVM,” unlike other ZK rollups like zkSync, smart contracts (which power your favorite dApps on Ethereum, including Uniswap and OpenSea) must be written in Cairo, the proprietary programming language of the network.

Cairo is a very strong language that is designed for ZK rollups. You can perform anything you do on an EVM with it, plus much more, because calculations are far less expensive.

This opens up brand-new possibilities for blockchains, such as real blockchain games, that weren’t before feasible.

Developers who would wish to begin developing for StarkNet may be discouraged from doing so since they would need to learn Cairo, which is a new programming language. Fortunately, smart contracts created for Ethereum can be translated into Cairo using a “transpiler,” such as Nethermind’s Warp, although they won’t be entirely optimized for the network.

When looking at the value of StarkNet, it is important to consider the entire StarkWare technology stack. StarkNet, StarkEx, and Cairo offer developers a robust, reliable solution that delivers the desirable properties of Ethereum, such as security and decentralization, while speeding up transactions and reducing costs. Here are some reasons why we think StarkNet could be one of the biggest winners in the layer 2 scaling solution race.

High focus on decentralization

The number one advantage of StarkNet is its strong focus on decentralization. STARK-proofs allow more users to verify the entire blockchain with low hardware requirements, and a permissionless layer of sequencers and provers ensures the network is censorship-resistant.

In terms of growth and development, the StarkNet Foundation uses 50.1% of the initial token supply for ecosystem development, and one of its development goals is to enhance the decentralization of StarkNet by developing governance mechanisms and establishing decentralized ordering and proofs.

This focus on decentralization helps attract the kind of builders we want to see in Ethereum — those focused on building an open network that adheres to the core principles of decentralized technology. We see this as a positive boost to the development of the ecosystem.

Complex projects can have richer tools in StarkEx

The second value proposition of StarkNet is the usability of StarkEx, the heavy-duty layer 2 scalability engine powering some of the largest networks such as dApps such as the perpetual trading platform dYdX, the layer 2 scaling solution ImmutableX and the NFT game Sorare.

One of the reasons for the successful launch of StarkNet is the batch processor used in StarkEx, which played a crucial role in the sequencing of StarkNet. After testing it on dYdX and other platforms, it gave developers confidence in StarkNet’s sequencer, despite launching it in a semi-complete state.

This proprietary engine is another reason StarkNet is attractive to developers considering building on the network. Complex applications can take advantage of StarkNet and StarkEx through vertical integration.

StarkNet behaves more like a decentralized blockchain with a gas fee mechanism that provides more general functionality at the expense of throughput. StarkEx is like a gigantic computer for ubiquitous use cases such as mass payments, transactions, and mass minting of NFTs. As the complexity and functionality of a Web3 application increases, it may be necessary to deploy parts of the project on different Rollups to optimize efficiency.

Ethereum boost

With the recent Ethereum merger completed, the focus now shifts to other tracks in Vitalik’s newly laid out Ethereum roadmap. “The Surge” is a second track focused on speed, aiming to achieve over 100,000 transactions per second with Roll Up. Not just any Roll Up, but a future-proof, quantum-safe SNARKed/STARKed Ethereum.

Investors have always been willing to look for opportunities in ZK technology and have huge expectations for the future of Ethereum expansion. StarkNet has undoubtedly benefited from a surge in investor interest, raising $100 million at an $8 billion valuation in a Series D round led by Greenoaks Capital and Coatue, with participation from investors such as Tiger Global.

CEO Uri Kolodny said the funds would be used for product and business development, engineering and growing the ecosystem. With sufficient resources, we expect StarkWare to start ramping up business development to accelerate the growth of its ecosystem against other Layer 2 competitors like Polygon.

Different programming languages may slow the adoption

Perhaps the biggest hurdle to adoption is Cairo, StarkNet’s programming language. While Cairo is powerful and optimized for provable computation, Cairo is more difficult to learn, and there are currently far fewer Cairo developers than Solidity developers. If developers don’t already know Cairo, they will experience additional friction when joining StarkNet, slowing StarkNet adoption.

Nonetheless, with the ZK movement generating massive momentum, we expect to see more developers choosing Cairo. The StarkWare team led by Eli Ben Sasson and Uri Kolodny is very capable and provides excellent support to the developers. In addition, Nethermind’s Nubia team has also released a Solidity to Cairo translator, allowing developers to quickly deploy smart contracts written on Solidity on StarkNet.

The current and future state of the ecosystem

Since StarkNet’s mainnet launch in November 2021, the StarkNet ecosystem has grown to include a large number of dApps across a wide range of different domains. Many infrastructure, wallets, tools and dev tools, DeFi, GameFi, and even NFT projects are built on StarkNet. The ecosystem is expanding and becoming more vibrant, with great potential to mature into one of the frontrunners in the Layer 2 race.

So far, StarkNet has been a more reserved contender in the Layer 2 race. Since its launch, it has focused on laying the groundwork for its fledgling ecosystem. However, restraint does not mean incompetence. Obviously, we have seen the availability of StarkEx on StarkNet; with its sufficient resources, StarkNet looks ready to enter a period of explosive growth and become a top contender in the scalability race.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Harold

Coincu News