Track market-moving stories before they get noisy

Privacy on a public blockchain has always felt like a contradiction in terms. Every transaction is visible, every wallet balance is readable, and your entire financial history is one block explorer search away from being an open book. Starknet thinks it has a fix.

On June 9, 2026, Starknet launched STRK20, a native privacy framework built into its Ethereum Layer-2 ZK rollup architecture. The system lets users shield any ERC-20 token balance, execute private transfers, and run private swaps, all without spinning up a separate privacy coin or fragmenting liquidity into isolated pools.

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How STRK20 actually works The framework runs on a note-based privacy pool: instead of broadcasting your token balance to the entire network, your assets are converted into encrypted “notes” that only you can open and spend. The proofs themselves are generated client-side using zero-knowledge cryptography, which means your device does the heavy lifting locally before anything touches the chain. On-chain, the network only verifies that a valid proof exists, not what the underlying transaction contains.

The first asset to use STRK20 was strkBTC, which went live on the framework following Starknet’s v0.14.2 protocol upgrade in April 2026. USDC support followed on June 25, 2026, extending privacy capabilities to one of crypto’s most widely used stablecoins. The system is designed so any ERC-20 token on Starknet can plug in without requiring separate liquidity. Supported wallets at launch include Xverse, AVNU, and Circle integrations.

The compliance piece, and why it matters STRK20 includes an encrypted viewing-key mechanism that allows users to selectively disclose transaction history to auditors, regulators, or legal counterparties without making that information public. Encrypted viewing keys can be held by third-party auditors, meaning a court order or compliance request can unlock a specific user’s transaction history without compromising anyone else’s privacy on the network.

What this means for Starknet’s competitive position Starknet’s rollout of STRK20 follows a deliberate build-up that began in March 2026 with initial privacy-related feature introductions, accelerating through the April 2026 full privacy engine implementation, and culminating in the June mainnet launch.

Starknet has signaled that upcoming phases will expand STRK20 into private lending products and cross-chain functionality.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

Starknet is rolling out its v0.14.3 upgrade to mainnet on July 8, bringing a suite of changes designed to make the Layer 2 network cheaper, faster, and harder to break. The headline features: dynamic gas fees that adjust to STRK’s token price, a 30% cut to target gas per block, and a quiet but meaningful shift toward quantum-resistant cryptography.

For a network whose native token is currently trading around $0.03 and whose total value locked sits at roughly $204 million, this is less a victory lap and more a necessary step to stay competitive in an increasingly crowded L2 landscape.

What’s actually changing The most consequential piece of the upgrade is SNIP-35, a proposal that introduces dynamic L2 gas base fee adjustments. Instead of static minimum gas fees, the network will now automatically recalibrate fees based on two variables: the fluctuating price of the STRK token and real-time network congestion.

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The second major change involves block architecture. Starknet v0.14.3 reduces the target L2 gas per block by 30% while keeping the maximum block size unchanged. The result is smaller but more frequent blocks, which translates directly into shorter block production times and reduced transaction latency.

The upgrade also introduces Keccak support for client-side proving and transitions specific operations from Pedersen hashing to BLAKE hashing. The BLAKE switch is explicitly aimed at quantum resistance.

Breaking changes and developer migration Starknet v0.14.3 deprecates RPC v0.8, meaning any developer or application still relying on that version needs to migrate before the switch flips.

StarkWare, the primary development team behind Starknet, has been providing migration guidance ahead of the July 8 date. The testnet activation happened in June, following multiple delays from earlier targets like June 22, giving developers a window to test their applications against the new protocol.

The mainnet migration itself is expected to incur approximately 8 minutes of downtime.

What this means for investors STRK trading at around $0.03 puts it in a challenging position. The dynamic fee adjustment mechanism ties gas fees to STRK’s market price, creating a feedback loop where network revenue remains somewhat stable in dollar terms regardless of token volatility.

Watch the TVL numbers in the two weeks following July 8. If locked value climbs meaningfully from the current $204 million, it suggests the fee and latency improvements are translating into actual user behavior changes.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

Skip to contentHow STRK20 brings confidential stablecoin payments to DeFi

Stablecoins have become the unit of account for onchain finance. They settle trades, move treasury, pay contributors, and back most of the liquidity that DeFi runs on. But every one of those transfers carries a cost that rarely gets named: it is permanently, irreversibly public.

On Starknet, this has changed with privacy features for USDC, built with STRK20. With STRK20, Starknet’s native privacy framework, USDC on Starknet gains confidential capabilities: shieldable, privately transferable, and usable across DeFi, without leaving the standard ERC-20 behind.

The transparency problem with blockchain transactionsSend stablecoins on any chain and you broadcast the full transaction to anyone watching: the sender, the recipient, the exact amount, and the timestamp, all written to a public ledger forever. For a base layer that’s a feature. For the entity actually moving the money, it’s an exposure.

A treasury rebalance reveals position size and intent. A market-making wallet leaks its strategy with every fill. Counterparties can map your entire balance history before you’ve signed a single agreement, and MEV searchers can reconstruct your behaviour from a single linked address. The transparency that makes the network trustworthy makes its most important asset hostile to anyone who needs discretion, which is to say most enterprises, most institutions, and a fair number of individuals who simply expect their finances to be their own.

Workarounds exist, but they fragment liquidity, demand new tokens, or wrap privacy in a separate app users have to trust and migrate to. None of that is the same thing as privacy on the asset you already hold.

Introducing USDC privacy features with STRK20STRK20 is a privacy framework for all ERC-20 tokens on Starknet. It lets any ERC-20 support shielded balances and private transfers without altering the token contract and without asking wallets or apps to rebuild from scratch. USDC is among the first stablecoins on Starknet to have these privacy capabilities.

The model is:

–  Shield USDC to hold a private balance, invisible to outside observers on the public ledger.

–  Unshield at any time to return to standard, fully transparent ERC-20 behaviour.

–  Transfer shielded USDC privately, with asset type, amount, and participating wallets all hidden from outside view.

Crucially, this is privacy at the protocol level, not an app integration. It’s the same USDC, in the same wallet, private when you need it to be and visible when you don’t. There’s no second token, no bridge into a walled garden, no duplicated balance to reconcile.

How it worksShielding moves USDC into a privacy pool where balances and transfers are protected by zero-knowledge proofs rather than published in the clear. A private transfer proves the transaction is valid (funds exist, the sender is authorised, nothing is double-spent) without revealing what moved, how much, or between whom.

Proof generation happens operator-side; verification happens at the sequencer level, using the same infrastructure Starknet already uses to prove its own blocks. Unshielding reverses the process, returning USDC to the public ledger whenever the user chooses.

And it won’t price privacy as a tax. Unlike approaches that skim a percentage of transaction value, STRK20 charges a fixed fee per transaction, closer to a gas fee than a toll. That flat cost is what makes private stablecoin payments viable at real volume rather than only for the largest transfers.

Confidential DeFi on Ready X and XversePrivacy that strands your assets isn’t very useful, so STRK20 is built for assets to stay composable. From the privacy pool, users will be able to swap in and out of USDC confidentially on Ready and XVerse wallets

That means you can hold a private balance and still participate in onchain markets without re-exposing yourself the moment you want to do something with it. These are the first integrations, not the last; more DeFi venues will follow as the framework rolls out.

Compliance architecture and viewing keysPrivacy and auditability are usually framed as a trade-off. STRK20 is designed to deliver both, by building compliance rather than bolting it on.

When a user shields, they automatically register a viewing key. The key is scoped to that user and that user alone. If a legitimate legal request is made, a designated third-party auditing entity can use it to reconstruct *that specific user’s* transaction history, and nothing else. No other participant in the pool is affected, and access sits with authorised bodies under legal process, never with counterparties, observers, or the users themselves peering into one another.

The result is privacy for users by default, with a clean, scoped path to auditability for regulators when the law requires it.

Why StarknetNone of this is incidental to Starknet; it’s a direct consequence of what the network was built on. Years of zero-knowledge research and engineering by StarkWare produced a STARK-based proving and verification stack efficient enough to make private payments both cheap and scalable, rather than a premium feature reserved for whales.

That same efficiency is why STRK20 can support complex private payments at scale where other privacy designs hit a wall. And it isn’t experimental: verification runs on the very infrastructure Starknet has used to prove its own blocks in production for over five years. Shielded USDC inherits that foundation.

Stablecoins gave onchain finance a unit of account. STRK20 is set to give it a private one.

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Confidential stablecoin payments are here on Starknet. Follow the rollout and get the technical details at strk20.starknet.io 

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@StarkWareLtd has unveiled a zero-knowledge identity system designed to let users pass a KYC check without surrendering their personal data to a central verifier. The prototype, called Private KYC, is built on STRK20, @Starknet's privacy layer, and works by flipping the logic of how identity verification is typically done.

How it works A user scans their passport using their phone's NFC chip. That identity data is then encrypted and bound to their own Starknet account rather than stored on a third-party server. When a KYC check is required, the system generates a zero-knowledge proof of just the fact that matters, such as confirming the user is over 18, while name, date of birth, and document number remain sealed. No central verifier holds a copy of the document, so there is no database to breach.

STRK20, which launched in early June, introduces zero-knowledge privacy features for ERC-20 tokens, letting users shield balances and make private transfers without moving assets to a separate privacy chain. The technical architecture relies on client-side zero-knowledge proofs built with StarkWare's Stwo prover and Cairo programming language. Private KYC extends that same infrastructure into identity verification.

Targeting a well-documented problem The timing of the demo is pointed. A KYC store becomes a data honeypot the moment it concentrates identity records someone else wants, and that concentration is something the rulebook compels, not something a control choice creates. The scale of recent incidents makes the case plainly: IDmerit, disclosed in February 2026, exposed a data set running to roughly 1 billion records, including approximately 203 million US records. Unlike traditional passwords or credit card numbers, biometric data cannot be changed if compromised, posing long-term security risks. If fingerprints or iris patterns are stolen, the victim is permanently vulnerable to identity theft.

StarkWare's architecture sidesteps this problem by design. Because no raw document is ever handed to a verifier, there is no archive to steal. StarkWare chief executive Eli Ben-Sasson has said zero-knowledge systems could allow future investigations to request narrower information, though the approach has not yet faced broad regulatory testing, and institutions will still need to assess its legal, security, and operational controls before adoption.

For now, Private KYC is a demonstration pitched at government and institutional audiences, not a live product. Whether regulators will accept a ZK proof as a substitute for a stored document copy remains an open question. But as centralized identity databases continue to attract attackers, the architectural argument for an alternative is only getting stronger.

Sources:
Starknet: Make ERC-20 Tokens Private with STRK20
Finextra: The KYC Data Honeypot Is a Retention Mandate, Not a Security Failure
Fincrime Central: IDMerit data breach, 1 billion records exposed