Starknet has launched STRK20, a note-based privacy layer that lets users transfer and swap ERC-20 tokens on its layer-2 network with shielded balances and private transactions. The protocol went live this week, marking the first phase of Starknet's broader push toward on-chain privacy — a development that's been in the works since the v0.14.2 protocol update.
How STRK20 works
STRK20 uses cryptographic notes to break the link between a sender and a receiver. Users deposit ERC-20 tokens into a shielded pool, then withdraw to a fresh address. The amounts and participants stay hidden from on-chain observers. The system supports both private transfers and swaps, all handled natively inside Starknet's infrastructure — no third-party relayers or extra dApps required.
The note-based approach relies on zero-knowledge proofs to verify that a user has deposited tokens without revealing which note is being spent. It's a design familiar from earlier privacy protocols, but Starknet's implemention is built directly into the L2's execution layer, which should mean lower friction and fewer overhead costs for users.
Building on v0.14.2
Development of STRK20 traces back to the v0.14.2 protocol update, which laid the groundwork for Starknet's privacy features. That upgrade introduced new primitives that made note-based privacy feasible on the network. The team hasn't detailed exactly which parts of v0.14.2 were necessary, but the timing suggests the privacy push has been a core engineering priority for months.
A first phase with more to come
Starknet has positioned STRK20 as just the opening piece of a larger privacy framework. The network hasn't announced specific timelines for subsequent phases, but the architecture implies future expansions — possibly to non-ERC-20 assets or more complex private smart contract interactions. For now, users can start experimenting with shielded ERC-20 transfers and swaps on Starknet's L2.
The launch comes as privacy tools remain a contested space in crypto, with regulators in several jurisdictions tightening scrutiny on mixers and shielded protocols. Starknet's decision to build privacy at the L2 level — rather than as a separate application — could give it a different regulatory profile, but that question will likely play out over the coming months.
