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AAX Trends

StarkWare 101: Explaining StarkEx, StarkNet, And The Recent Surge in L2 Network Activity

StarkWare 101: Explaining StarkEx, StarkNet, And The Recent Surge in L2 Network Activity

Explainers

07 Nov 2022

StarkWare, a prominent layer 2 provider, has recently shared network data with the crypto community. The data shows that it settled 12 million transactions on Ethereum's mainnet in late October. Its activity has even surpassed the latter blockchain's network.

As one of the most anticipated events in the crypto market, September's Merge set the stage for future Ethereum upgrades.

Among them is sharding which is a crucial change that has the potential to solve the scalability problems of the Ethereum blockchain. The sharding upgrade can take place without negatively impacting the network's security and decentralization.

That said, layer 2 scalability solutions continue to play a critical role in Ethereum's ecosystem by enabling fast and inexpensive transactions for users while tapping into the mainnet's security.

StarkWare, a prominent layer 2 provider, has recently shared network data with the crypto community. The data shows that it settled 12 million transactions on Ethereum's mainnet in late October. Its activity has even surpassed the latter blockchain's network.

But what is the reason behind StarkWare's surging network activity in the past few weeks? Let's find out together in this article!

StarkWare, StarkNet, StarkEx And ZK-Rollups

Before we jump right to our main topic, let's first take a quick look at StarkWare and its layer 2 (L2) scalability solution for Ethereum.

StarkWare is an Israel-based blockchain company that develops products to enhance Ethereum's scalability by providing low-cost and instantaneous transactions on layer 2.

To achieve this goal, StarkWare leverages ZK-rollups. Ethereum co-founder Vitalik Buterin expects this technology to become one of the leading long-term solutions for smart-contract blockchain's second layer. Without going too much into the technical details, the company utilizes ZK-STARKS (zero-knowledge scalable transparent arguments of knowledge). This form of ZK-rollups focuses on scalability instead of privacy.

Compared to other L2 projects using ZK-rollup tech, it's safe to say that StarkWare has been in a favorable position in terms of its development. While the latter launched the alpha version of its layer 2 networks StarkNet on Ethereum's mainnet in November 2021, zkSync deployed its mainnet "baby alpha" this October. At the same time, Scroll's and Polygon's ZK-rollup solution has been in a testnet stage since July and October 2022.

As a key highlight, StarkWare has been focusing on scalability not just in the roll-up tech it uses but also in its approach. The project uses its custom programming language called Cairo. Cairo will achieve enhanced scalability at the sacrifice of a certain level of compatibility with the Ethereum Virtual Machine (EVM).

Regarding StarkWare, it's also notable to mention StarkEx. StarkEx is a STARK-based scaling solution that has been up and running on Ethereum's mainnet since July 2020. StarkNet is a decentralized L2 blockchain that can host any application developers build on top of it. While StarkEx is a permissioned layer 2 scalability engine that offers a tailored solution for individual dApps.

Explaining The Recent StarkEx Boom

Now that you know the essentials about StarkWare and its products, it's time to explore the recent growth of network activity within the project's ecosystem.

On October 21, StarkWare stated that 12 million transactions were settled on Ethereum by StarkEx between October 17 and 21.

It can be clearly seen on the chart shared by the project that its permissioned ZK-rollup solution's activity has surpassed not just the Optimism and Arbitrum L2 networks but also Bitcoin's mainnet and Lightning Network. There were even days when StarkEx processed more transactions than Ethereum's mainnet.

Interestingly, L2Beat confirms the trends shared by the company. According to the data on the website, the 30-day transaction count of layer 2 protocols built by StarkEx – Immutable X, dYdX, Sorare, and rhino.fi (formerly DeversiFi) – featured a combined 30-day transaction count of nearly 24 million, which outpaces all other L2 protocols' and gets quite close to the Ethereum mainnet's 32.50 million. At the same time, StarkNet processed 252,000 transactions in the last 30 days.

With all that in mind, the recent surge in network activity is likely due to StarkWare's ability to capitalize on StarkEx's early launch and scalability features. It has enabled the company to integrate its permissioned L2 solution with well-known and active dApps.

StarkWare had its share of positive developments, allowing its ecosystem to expand in recent weeks. Besides raising $100 million in a series D round in May, the project upgraded its Cairo custom programming language to the 1.0 version in September to make it safer, simpler, and more usable for developers.

Furthermore, news was shared about the Warp compiler, which aims to make the transition from Solidity-based code on Ethereum to Cairo on StarkNet seamless for developers. According to the solution's creator, Nethermind, Uniswap v3 was "transpiled and compiled" on Warp in October, which would enable the DeFi protocol to be deployed to StarkNet.

At the same time, other popular protocols, such as the DeFi lending platform Aave, have been working on their StarkNet integrations.

StarkWare Takes The Lead in L2 Activity

StarkWare is in a unique position among layer 2 protocols. It not only utilizes a technology praised by Ethereum's Vitalik Buterin. It has also been way ahead of its ZK-rollup-based competitors in terms of its scalability solutions' development.

Consequently, StarkNet's ecosystem is expected to expand with well-known dApps soon. The permissioned StarkEx ZK-rollup solution has been utilized to achieve fast and inexpensive transactions for prominent protocols, such as dYdX, Sorare, and Immutable X.

StarkWare has been experiencing a massive boost in network activity, which enabled StarkEx to process more transactions in recent weeks than other L2 solutions and Bitcoin's mainnet.

As StarkEx's network activity has been close to the Ethereum mainnet's, StarkWare had its share of positive news in the last few months, including a $100 million fundraising round and Cairo 1.0.

The question now is: will StarkWare be able to maintain its top position among ZK-rollups in the future, as competitor solutions are getting closer to launch?

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