In brief
- Starknet will support a Bitcoin-based asset that enables better privacy
- The token will be called strkBTC, and it will feature Zcash-like features
- It will have a viewing key for compliance purposes.
Starknet revealed a Bitcoin-based asset on Thursday aimed at enabling people to better maintain their privacy on the Ethereum layer-2 scaling network.
The upcoming token dubbed strkBTC will allow individuals to shield account balances from public view and make confidential transfers, according to a press release shared with Decrypt by the Starknet Foundation and StarkWare, the network’s creators.
Even when the token is held in a way that makes it more difficult to track, strkBTC is designed to maintain its functionality across various decentralized finance applications. Users will also be able to stake the token on the network to earn rewards, the press release stated.
In some ways, strkBTC mirrors the functionality of Zcash, a privacy-focused cryptocurrency that enables users to hide key details of transactions using zero-knowledge proofs. Those allow parties to prove the validity of computations without revealing the underlying information.
Like Zcash, strkBTC is designed to be held in public and private addresses, providing flexibility for compliance. The token debuting on Starknet will also be auditable through a viewing key and “other mechanisms designed to be risk management compatible,” the press release stated.
The overlap makes sense, considering that StarkWare co-founder and Starknet Foundation board member Eli Ben-Sasson helped shape Zcash’s privacy-preserving cryptography.
“Privacy is a fundamental requirement for market participation,” he said in a statement. “Zero-knowledge cryptography makes that possible by keeping markets open while participants remain confidential. strkBTC is the first proof of what this approach enables.”
StarkWare General Counsel Katherine Kirkpatrick Bos told Decrypt that individuals will be able to access strkBTC using a bridge that’s powered by Atomiq Labs. That company enables people to swap their Bitcoin for digital assets on other networks, including Starkent and Solana.
Traditional bridges often create a centralized “middleman” risk, where users are forced to trust a third-party with their funds. Atomiq Labs says it avoids this by using atomic swaps, where math—not a company—ensures the trade happens safely, or the money returns.
“We’re trying to mitigate the use of third-parties,” Kirkpatrick Bos said. “There’s certainly a wide spectrum of wrappers and credibility associated with the projects behind those wrappers, so we want this to be as resilient as possible.”
Kirkpatrick Bos noted that the strkBTC viewing key will be held by a third-party, so there’s a mechanism to comply with regulatory inquiries. The press release noted that strkBTC provides privacy at the infrastructure level, not using wallets or off-chain intermediaries.
Over the past couple of years, Starknet has intensified its focus on Bitcoin, positioning itself as a way to leverage the asset beyond transfers. In September, the network began allowing users to bolster its security by staking Bitcoin-based assets, with rewards paid out in its native STRK token.
Last month, Starknet suffered a block issue that led to more than four hours of downtime, marking its second operational outage within the span of a few months.
STRK changed hands around 4.2 cents on Thursday, a roughly 80% decrease over the past year, according to CoinGecko. That was just above an all-time low of 3.9 cents earlier this week.
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