Top 10 StarkNet’s DeFi Projects in 2023
In Brief
StarkNet is a Layer-2, ZK-Rollup-based protocol, enabling dApps to achieve limitless scalability without sacrificing Ethereum’s security.
StarkNet boasts a unique language, Cairo, for writing smart contracts and is seeing remarkable growth, with its TVL having risen by 4000% to $1.1Mn+.
The DeFi landscape has undergone a significant transformation, and StarkNet is at the heart of this revolution. StarkNet, a Layer-2 (L2) protocol, is an innovative solution built on ZK-Rollup technology. This article explores StarkNet’s intricacies, shedding light on its native language, account abstraction, and ten leading projects thriving in its ecosystem.
Understanding StarkNet: An Innovative Layer-2 Protocol
StarkNet, based on the robust cryptographic proof system STARK, is a decentralized Layer-2 protocol designed to facilitate the development of decentralized applications (dApps). This L2 protocol leverages ZK-Rollup technology, maintaining high-level privacy and security by preventing the exposure of off-chain prover inputs on the blockchain.
What sets StarkNet apart is its scalability and security, which doesn’t compromise Ethereum’s composability. This unique feature is possible thanks to Cairo, the native language of StarkNet. With StarkNet contracts and the StarkNet Operating System being written in Cairo, it becomes feasible to deploy a wide range of business logic.
The Role of Cairo and Account Abstraction in the StarkNet Ecosystem
Cairo is to StarkNet what Solidity is to Ethereum. This language is integral to StarkNet, serving as the backbone for writing smart contracts. StarkWare recently unveiled Cairo 1.0, an improved version of the language with simplified and more efficient syntax, intuitive libraries, and better compiler integration.
Account abstraction, another defining feature of StarkNet, aims to enhance the user experience and adoption rate in the world of Web3 and DeFi. This innovative solution creates smart-contract-based wallets, reducing the risk associated with losing seed phrases and private keys. StarkNet’s application of account abstraction is reflected in projects like Argent X and Braavos.
Now, let’s dive into the top 10 DeFi projects on StarkNet that have made waves in 2023.
1. Argent X StarkNet Wallet
Argent X stands out with its decentralized wallet that implements multi-signature security and social recovery. Recently, Argent X has introduced new products aimed at improving self-custody wallets, from seed-less wallets to multi-signature functionalities for Decentralized Autonomous Organizations (DAOs).
Its advanced safety mechanism automatically halts all transactions unless they originate from trusted addresses or are approved via multifactor authentication. This high-level security protocol shields every Ethereum asset under its custody, including high-value NFTs worth millions of dollars.
Uniquely, Argent eliminates the need for a seed phrase, addressing the single point of failure that often plagues traditional self-custody wallets, including hardware variants. This innovation significantly enhances user experience, reducing complexity while improving security.
During the recent StarkWare Sessions, Argent made some major announcements. They revealed four new products set to revolutionize the wallet space: a seed-less wallet that further simplifies user experience, two-factor authentication (2FA) for Argent X to reinforce security, Starknet mobile integration to bring Layer-2 scalability to mobile platforms, and multi-signature functionality for DAOs to bolster collective decision-making security.
Argent is not merely a wallet; it’s an evolving ecosystem that combines state-of-the-art security with seamless user experience, redefining the standards for decentralized wallets.
2. Braavos
Braavos is a smart-contract-based wallet that takes advantage of account abstraction. By developing an experience akin to Web2, Braavos aims to enhance the user interface and include features that allow for easy account recovery. It stands out by harnessing the power of account abstraction, providing a superior user experience reminiscent of traditional Web 2.0 interfaces. Braavos is readily accessible across multiple platforms including iOS, Android, and web browsers.
Braavos is redefining convenience in the crypto space, developing innovative features that eliminate the need for seed phrases while ensuring a straightforward recovery process for user accounts. But its ambitions go beyond just being a wallet. The project plans to extend its services to include staking, borrowing, and lending, further solidifying its position in the decentralized finance ecosystem.
Braavos is also committed to providing more granular control over funds to its users. It plans to introduce account segmentation, which will allow users to separate long-term, high-value savings from everyday, low-value spending. This feature will support withdrawal limits and time delays, adding an extra layer of security and control.
In a move towards transparency and community trust, Braavos has recently declared their wallet account contracts to be open source. This openness allows for community auditing, a step that further underlines Braavos’ commitment to security and user trust.
3. Orbiter Finance
Orbiter Finance is a decentralized Layer-2 bridge that enables low-cost and immediate transfers across Ethereum’s mainnet, zkSync, and Arbitrum. Its unique model involves two roles – the Sender and the Maker, providing liquidity to ensure smooth transactions. It facilitates low-cost, instantaneous transfers between the Ethereum mainnet, zkSync, and Arbitrum, significantly optimizing cost and speed for the users.
Orbiter Finance operates on a dual-role system consisting of ‘Sender’ and ‘Maker.’ The process initiates when the Sender requests a transfer, to which the Maker responds by providing the necessary liquidity. A smart contract oversees the entire transaction, ensuring utmost security.
In the event of a failed transaction attributable to the Maker’s misconduct, Orbiter Finance provides a failsafe system. The Sender can trigger an arbitration request to the smart contract with the Maker’s margin, thereby receiving additional compensation as a result of the mishap. This system safeguards users and maintains high trust in the protocol, despite the platform’s decentralized nature.
Read more: ZK-Proofs: What Are the Benefits of ZK?
4. Starkgate by StarkNet
Starkgate, currently in the pre-testnet phase, is developing a bridge between Ethereum and Starknet for token transactions. It is making strides to leverage Starknet’s computational compression capabilities for transaction facilitation. Every supported token is paired with corresponding Level 1 (L1) and Level 2 (L2) bridge contracts that effectively communicate via Starknet’s messaging architecture.
The aim of these bridges is to empower users with the capacity to manage their Ethereum (ETH) and ERC-20 tokens currently hosted on L1 with ease. The Starknet Alpha network, harnessing STARK-based computational compression capabilities, accomplishes this. This novel method seeks to transform the way transactions occur across the two networks, significantly improving efficiency and scalability in the process.
5. JediSwap
JediSwap, a permissionless composable Automated Market Maker (AMM) on Starknet, allows users to make swaps at zero gas costs while retaining fund custody. Protocol offers users the ability to conduct swaps with zero gas fees, while maintaining complete custody of their assets, making decentralized finance more accessible and cost-effective.
The platform employs a minimalistic fee structure, with the sole fee being a swap fee of 0.3%. As of the present moment, these fees are evenly distributed among the liquidity providers, offering an additional income stream for those participating in the platform’s liquidity pools.
To effectively experiment with JediSwap on the Starknet testnet, users will require tokens on the said testnet. Most mainstream tokens such as USDC, ETH, and DAI are supported. One can obtain these test tokens on the Goerli test network, and subsequently migrate them to Starknet utilizing the Starkgate bridge, thereby experiencing firsthand the efficiency and cost-effectiveness of JediSwap’s offerings.
6. Nostra
Nostra is developing a liquidity layer on Starknet, composed of the Nostra Money Market, UNO (the first Starknet-native stablecoin), and Nostra Swap. The goal is to ensure liquidity within the ecosystem and offer yield across Nostra Swap and for UNO minters.
The Nostra Money Market forms the backbone of the Liquidity Layer, fostering continual productivity of liquidity within the ecosystem. Moreover, it enables the generation of yield across Nostra Swap and for UNO minters.
Nostra Swap is a next-generation stablecoin swap platform aimed at supporting UNO’s growth and stability. Liquidity providers on Nostra Swap enjoy the dual benefit of earning yield from lending their stablecoins on the Nostra Money Market and garnering swap fees.
UNO, a pioneering stablecoin native to Starknet, is bolstered by ETH holdings that generate interest, thereby exceeding the collateralization requirements. This mechanism allows minters to accrue yield on their ETH while simultaneously leveraging the benefits of UNO within the Starknet ecosystem. UNO is multifunctional, specifically designed for use across a wide range of platforms, from DeFi and gaming to NFTs, real-world payments, and more.
Read more: ZK-Proofs: What Is Zero Knowledge?
7. Starknet.id
Starknet[.]id is working towards offering Starknet’s ENS, where users can mint their Starknet identity for free. It serves as an on-chain representation and a passport in the Starknet ecosystem.
This identity enables users to attach any data to their Starknet identity, ranging from traditional web2 elements like social media accounts to web3 elements like ENS domains. Looking towards the future, the team behind Starknet.id has plans in the pipeline to develop ENS bridges, Starknet id dashboards, and additional features to augment the user experience and broaden the service’s capabilities.
8. ZKX
ZKX is setting the pace as the first perpetual futures exchange on Starknet. It provides access to global yields through its offerings to users on Starknet and Ethereum. It opens the door for perpetual swaps and derivatives to all users on Starknet and Ethereum, thus broadening their financial capabilities.
ZKX propels its mission to make global yield opportunities accessible to everyone through its product offerings, extending these financial benefits to people all over the world, regardless of where they live.
In an exciting recent development, ZKX launched its Community Incentives Program. This initiative combines contributor and ambassador programs within a gamified environment, encouraging user participation and fostering a sense of community.
9. zkLend
zkLend is a money-market protocol that combines zk-rollup scalability, superior transaction speed, and cost savings with Ethereum’s security. It offers a dual solution: a permission and compliance-focused solution for institutional clients and a permissionless service for DeFi users. This protocol ingeniously caters to two distinct user groups: institutional clients and DeFi users.
zkLend provides a solution for institutional clients that prioritizes permission and compliance, meeting their high standards and expectations. On the other hand, DeFi users can benefit from a permissionless service that enables them to navigate the DeFi ecosystem freely. Significantly, these features are delivered while still maintaining decentralization, thus preserving the fundamental principles of blockchain technology.
Read more: A Beginner’s Guide to the zkSync Ecosystem
10. Brine
Brine is a cross-chain decentralized exchange (DEX) designed to overcome the slippage problem. It uses the order book model instead of AMM for trading, thereby eliminating gas fees.
In a bid to combat the prevalent issue of slippage, it employs an order book model instead of Automated Market Makers (AMM) for executing trades. Users can enjoy a competitive 0.1% transaction fee structure, and notably, the platform absolves them from any gas charges.
And with that, we conclude the 5th installment of our ‘Back to Basics’ series. Stay tuned as we continue to elucidate on fascinating topics like the Starknet ecosystem, DeFi, trading practices, and the unique offerings of ZKX in our upcoming editions!
Conclusion
The advancement of DeFi on the Starknet ecosystem is undeniably reshaping the way customers perceive and interact with finance. It is clear that the space is brimming with innovation and groundbreaking technology, all underpinned by the power of Starknet.
The rise of Layer 2 solutions like Starknet signifies the continued evolution of blockchain technology, offering a fresh promise of scalability without compromising on the critical aspects of security and decentralization. Starknet’s unique attributes such as the $STRK token, the Cairo language, and account abstraction have all contributed to setting the stage for a groundbreaking surge of DeFi projects.
The top projects spanning wallets, bridges, and DeFi platforms are pushing the boundaries of what’s possible in the blockchain space. Whether it’s Argent X and Braavos that are revolutionizing the wallet experience, Orbiter Finance and Starkgate providing seamless asset transfer across chains, or JediSwap and Nostra innovating within DeFi, each project brings a unique approach to solving the challenges of the existing financial system.
While the journey of Starknet has been inspiring thus far, the future promises even more exciting developments. As we’ve seen, this Layer 2 solution isn’t just an enhancement of the Ethereum blockchain—it’s a bold leap forward in the story of decentralized finance. And if the caliber of projects already in the Starknet ecosystem is any indication, the possibilities for what comes next are truly limitless.
FAQ
Starknet is a decentralized Layer 2 protocol based on ZK-Rollup technology. The design aims to enhance scalability, while maintaining the security and composability inherent to Ethereum. The protocol uses a highly scalable cryptographic proof system called STARK.
The $STRK token is the native token of the Starknet protocol. The announcement and deployment of the token on the Ethereum Mainnet occurred in November 2022. Users utilize the token for diverse functions including voting, staking, and fee payment.
Cairo is the proprietary language of the Starknet ecosystem, similar to how Ethereum uses Solidity and Solana uses Rust. Cairo 1.0, an upgraded language, provides the functionality to write smart contracts on Starknet. This upgrade brings an enhanced syntax, intuitive libraries, and superior compiler integration to the table.
Account Abstraction is a cutting-edge innovation that allows for the creation of smart-contract-based wallets, eliminating the need to remember seed phrases and private keys. This simplifies the process for new users entering the world of web3 and DeFi.
The Starknet ecosystem hosts several innovative projects. Notable ones include Argent X and Braavos (wallets), Orbiter Finance and Starkgate (bridges), and JediSwap, Nostra, ZKX, zkLend, and Brine (DeFi platforms). Starknet.id is also a pioneering NFT platform within the ecosystem.
Starknet’s future is bright, with the potential to become a cornerstone in the DeFi landscape. Its ecosystem promises to continually diversify and innovate, making it more inclusive and capable of addressing a broad range of user needs and preferences.
Read more:
- A Beginner’s Guide to the zkSync Ecosystem
- ZK-SNARKs vs ZK-STARKs: How Do ZK-Proofs Differ?
- History of Zero-Knowledge Proofs: From Cryptography to Blockchain
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
