Simply put
- Starknet is introducing Bitcoin-based assets to enhance privacy.
- The new token, strkBTC, will offer features similar to Zcash.
- It includes display keys for regulatory compliance.
Starknet announced plans for Bitcoin-based assets on Thursday, aimed at helping users preserve their privacy on the Ethereum Layer 2 scaling network.
A press release highlighted that the upcoming strkBTC token will let users keep their account balances confidential and facilitate private transfers.
strkBTC is built to function effectively across various decentralized finance applications, even when tokens are kept in less traceable ways. Users will be able to stake their tokens on the network and earn rewards, according to the release.
1/ It’s finally time for Bitcoin to get privacy.
Introducing strkBTC [₿]: A new wrapped Bitcoin token with built-in privacy features.
Protect your Bitcoin balances and transfers, or don’t. You choose 🧵
— Starknet (Privacy x BTCFi Arc) 🥷 (@Starknet)
strkBTC mirrors the capabilities of Zcash, a cryptocurrency that emphasizes privacy by allowing users to obscure key transaction details through zero-knowledge proofs.
Like Zcash, strkBTC can be held in both public and private addresses, lending itself to compliance needs. These new tokens will be auditable using visibility keys and other methods aligned with risk management.
This connection is significant since Eli Ben-Sasson, a co-founder of StarkWare and a board member of the Starknet Foundation, played a role in Zcash’s privacy-oriented technology.
“Privacy is essential for market engagement,” he stated, adding that zero-knowledge cryptography sustains market openness while safeguarding participant anonymity. strkBTC is the initial demonstration of what this innovative approach can accomplish.
Katherine Kirkpatrick Boss, general counsel at StarkWare, remarked that users can access strkBTC through a bridge provided by ATOMiq Labs. This bridge facilitates the exchange of Bitcoin for digital assets across networks like Starknet and Solana.
Unlike traditional bridges that might necessitate trusting third-party intermediaries, ATOMiq Labs utilizes atomic swaps to ensure safe transactions, relying on mathematical guarantees rather than company assurances.
“We aim to limit third-party reliance,” Kirkpatrick Boss explained. “Our goal is durability, as there’s a wide array of wrappers and trust concerns related to those projects.”
She noted that since strkBTC’s viewing keys are managed by a third party, it allows for responses to potential regulatory inquiries. The release clarified that strkBTC operates without wallets or off-chain intermediaries, maintaining privacy at the infrastructure level.
In recent years, Starknet has sharpened its focus on Bitcoin, seeking to leverage assets beyond simple transactions. As of September, users have been able to stake Bitcoin-based assets for added security, receiving rewards in the native STRK tokens.
However, Starknet faced challenges last month with a block-related issue that led to over four hours of downtime, marking the second outage in two months.
As of Thursday, the STRK token was trading at around 4.2 cents, reflecting an approximate 80% decline over the past year, just marginally above an all-time low of 3.9 cents reached earlier this week.
