Ethereum layer-2 network Starknet has launched a wallet privacy feature that allows users to interact with decentralized finance (DeFi) applications without publicly linking activities to their primary wallets.
StarkWare, the development team behind Starknet, introduced the Shadow Accounts feature, which creates separate, persistent addresses for individual applications. Users can fund these accounts using shielded balances held in the network's STRK20 privacy pool, enabling them to maintain lending, trading, and other DeFi positions under different onchain identities.
The privacy feature obscures the connection between the shadow account and the wallet funding it. However, the balances, transactions, and positions of these shadow accounts remain publicly visible onchain.
When integrated into a DeFi application, users can connect their wallets, switch to private mode, and deposit assets into a vault. Shadow Accounts then maintain their positions until users withdraw funds back into a shielded balance.
StarkWare indicated that the functionality could eventually expand beyond vaults to include liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets, and NFT marketplaces.
The launch represents part of StarkWare's broader privacy initiatives. In June, the company introduced its STRK20 privacy framework, which enables private transfers and shielded token balances on Starknet. Later that month, StarkWare demonstrated a Private Know Your Customer system that allows users to verify personal information without revealing their full identity documents.
