Starknet Launches Shadow Accounts for Private DeFi Activity

TLDR

• Starknet launched Shadow Accounts, a feature that separates users’ main wallets from their DeFi activity.
• The accounts are separate, persistent addresses for individual apps, funded from the STRK20 privacy pool.
• Balances, transactions and positions in Shadow Accounts remain publicly visible onchain.
• StarkWare said the feature could later expand to lending, staking, derivatives, prediction markets and NFT marketplaces.
• The launch follows StarkWare’s STRK20 privacy framework and Private KYC system, both introduced in June.

Starknet, a layer-2 network built on Ethereum, has launched a new wallet privacy feature for decentralized finance users. The tool is called Shadow Accounts.

The feature lets users interact with DeFi apps without publicly linking that activity to their main wallets. StarkWare, the company behind Starknet, announced the launch on X.

Shadow Accounts create separate addresses for individual applications. These addresses are persistent, meaning they stay in place over time.

How Shadow Accounts Work

Users fund their Shadow Accounts with shielded balances. These balances are held in the network’s STRK20 privacy pool.

This setup allows users to keep lending, trading or other DeFi positions under different onchain identities. Each app can have its own account tied to the same user.

The feature hides the connection between a Shadow Account and the wallet that funds it. This makes it harder to trace the account back to its owner’s main wallet.

The privacy has limits. According to Starknet, the balances, transactions and positions of Shadow Accounts remain publicly visible onchain.

In other words, people can still see what a Shadow Account holds and does. What is hidden is which main wallet sits behind it.

Once a DeFi app integrates the feature, users can connect their wallets and switch from public mode to private mode. They can then deposit assets into a vault.

The Shadow Account holds the user’s positions until they withdraw. At that point, the funds move back into a shielded balance.

Plans to Expand the Feature

For now, the feature centers on vaults. StarkWare said it could eventually extend to other parts of DeFi.

Those areas include liquidity provision, lending, borrowing and staking. The company also listed derivatives trading, prediction markets and NFT marketplaces.

The launch is part of a wider privacy effort by StarkWare this year. The company has released several privacy tools in recent months.

In June, StarkWare introduced its STRK20 privacy framework. The framework allows private transfers and shielded token balances on Starknet.

The STRK20 privacy pool that funds Shadow Accounts is part of this framework. It serves as the base for the new feature.

Later in June, StarkWare demonstrated a Private Know Your Customer system. The system lets users verify personal information without revealing their full identity documents.

Shadow Accounts are now the newest tool in that lineup. Users can access the feature through DeFi apps that choose to integrate it.

The post Starknet Launches Shadow Accounts for Private DeFi Activity appeared first on Blockonomi.