StarkWare: Advancing Layer 2 Scaling
Founded in 2017, by Alessandro Chiesa, Eli Ben-Sasson, Michael Riabzev, and Uri Kolodny, StarkWare is a startup based out of Israel whose mission is to bring scalability and privacy to blockchain technology; some of the founders’ names may ring a bell as many were integral to the creation of Zcash, a privacy-protecting digital currency. Certain blockchain and exchange usability has well-known flaws regarding privacy and scalability. StarkWare has created an efficient solution. Utilizing their main product StarkEx, STARK technology has an array of solutions including reduction in gas fees, self custodial dApps, flexibility, and increased privacy.
StarkWare allows for both on and off chain capability depending on the specific needs of each client. Some protocols may benefit from code that runs on the blockchain, while others can utilize their services that run in the cloud. For example, dYdX, a leading decentralized exchange recently integrated StarkEx in order to support the hypergrowth of DeFi and cryptocurrency in general. The integration combines “STARK proofs for data integrity with on-chain data availability to ensure a fully non-custodial protocol.” (dYdX). StarkWare’s zkSTARKS (Zero-Knowledge Scalable Transparent Arguments of Knowledge) technology utilizes ZK-Rollup’s to help scale and secure protocols. StarkWare not only allows for gasless trading, but also instant trade settlement, faster price oracles, and greater privacy for all users. dYdX saw a massive influx of volume after integrating with StarkWare, exceeding $10 million in trading volume within the first 24 hours of launching. Ten days since launch, dYdX holds the rollup record of $36 million in 24H trading volume. It’s clear that users are attracted to the many benefits of Layer 2 scaling.
Ethereum’s gas fees have steadily risen and continue to do so as the cryptocurrency ecosystem grows. While flashbot adoption has recently allowed for somewhat affordable gas fees, an efficient resolution is needed for expanding adoption. Scaling solutions directly from the Ethereum foundation are underway, but most protocols utilizing the Ethereum blockchain are in need of solutions sooner than later. While waiting on EIP-1559 and future Layer 2 platforms like Arbitrum, Optimism, and zkSync, StarkWare offers an extremely efficient mitigation to the scaling and privacy issues that many face.
It’s safe to say that StarkWare is providing crucial value to the cryptocurrency ecosystem, specifically helping advance DeFi projects and protocols, as almost all DeFi leaders in the space are built on Ethereum. With backing from Coinbase Ventures, Intel Capital, Paradigm, Three Arrows Capital, and many more, StarkWare has already begun to make a positive impact by bringing scalability and privacy to blockchain technology. I look forward to seeing StarkWare expand and partner with other leading protocols in order to pave the way for mass adoption. It will be interesting to see the “Layer 2 wars” play out as other options for scaling begin to rollout. Overall, the advancement of scaling will play a major role in the increasing adoption of all things crypto.
StarkWare Website: https://starkware.co/
StarkWare Twitter: https://twitter.com/StarkWareLtd
dYdX Website: https://dydx.exchange/
dYdX Twitter: https://twitter.com/dydxprotocol
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