StarkWare Cuts Staff and Splits Into Two Units to Drive Revenue Focus.

StarkWare, the Israeli company behind the Ethereum scaling network Starknet, is restructuring by reducing its workforce and splitting into two business units. CEO Eli Ben-Sasson has acknowledged the company had grown “too large” for its current commercial reality.

Revenue on its Starknet network has fallen more than 99% from a late-2023 peak. Specifically, monthly network revenue has dropped from nearly $6 million in late 2023 to approximately $48,000 by early April 2026. That is a steep decline for a company once valued at $8 billion. View post on X

What StarkWare Actually Does — and Why It Matters

Before diving into the restructuring, it helps to understand what StarkWare builds.

StarkWare develops a type of cryptographic technology called STARK proofs — short for Scalable Transparent Argument of Knowledge. Starknet is making waves as a game-changing Top Layer 2 Crypto Projects that aims to scale Ethereum efficiently. Imagine a bridge connecting the two biggest digital currencies, Bitcoin and Ethereum, allowing them to finally work together. Starknet is pioneering this by being the first Layer-2 network to settle transactions on both blockchains.

How does it work? It uses advanced “zero-knowledge rollups” and a smart new way to manage a Bitcoin reserve. The big goal is to take Bitcoin, which is often just sitting there as a “store of value,” and turn it into a high-speed, productive asset for decentralized finance (DeFi). This means faster transactions and the ability to use smart contracts with BTC.

They’re not doing this alone; they’ve teamed up with the Xverse wallet and are actively exploring the OP_CAT upgrade to make Bitcoin even more programmable. Starknet is building a Starknet Bitcoin bridge to tear down the walls between these two major blockchain ecosystems, creating a secure, seamless flow for money and decentralized applications.

In practical terms, this means StarkWare helps Ethereum process more transactions at a lower cost. Rather than recording every transaction directly on Ethereum’s main chain, Starknet bundles thousands of transactions, generates a compressed cryptographic proof, and sends that proof to Ethereum for verification. The result: faster, cheaper transactions without sacrificing the security guarantees of the main chain.

Also read: The strategic shift at Block, Inc. following a massive 40% workforce reduction amid recent Block layoffs.

StarkWare has two core products:

• StarkEx — a permissioned, customisable scaling solution for specific applications (used by platforms like dYdX and Sorare)
• Starknet — an open, permissionless network where any developer can build decentralised applications

The company was founded in 2018 and is backed by high-profile investors including Sequoia Capital, Paradigm, and Coatue. It raised $100 million in a Series D round in May 2022 at a valuation of $8 billion, with total funding of $261 million.

The Restructuring: Two Units, One Clear Goal

The reorganisation splits StarkWare into two distinct operating units:

• Applications — focused on commercial product lines and enterprise deployments, likely centred around StarkEx
• Starknet — focused on the open network, its ecosystem growth, and infrastructure

CEO Eli Ben-Sasson, who has served as both CEO and president of StarkWare since February 2024, is driving this change with a clear commercial mandate. The stated aim is to refocus the company on revenue generation and high-value business areas, rather than maintaining a broad, expensive headcount.

The move signals a shift in priorities. StarkWare is stepping back from operating as a large, research-heavy organisation and leaning into a leaner, more commercially accountable structure.

The Revenue Story: What the Numbers Tell Us

Monthly network fees on Starknet have fallen from roughly $6 million in late 2023 to around $48,000 in April 2026. That is a drop of over 99%.

Several factors explain this:

• Lower transaction volumes on Starknet compared to peak activity periods
• Fee compression across Ethereum Layer 2 networks has broadly intensified as competition has intensified

Network reliability issues, including a four-hour outage in January 2026 caused by delays in block production and transaction processing inconsistencies, which followed a September 2025 outage linked to the Grinta upgrade that caused nine hours of downtime.

Repeated disruptions are costly — not just technically, but reputationally. Each outage chips away at developer confidence. For a network competing for builders and liquidity, stability is as important as raw technology.

That said, Starknet has not been standing still. The S-two prover, integrated into Starknet mainnet in November 2025, delivered a 100x efficiency increase over its predecessor. Additionally, the ecosystem finished 2025 with over 1.1 billion STRK staked — an 11x increase from the start of the year. These are genuine technical milestones.

See how Bitcoin Layer 2 solutions can achieve scalability and utility.

Leaner structures may produce sharper focus.

Separating the applications business from the core network is a sensible corporate move. It lets each unit set its own KPIs, pursue its own partnerships, and be measured on its own merits. The applications unit can chase enterprise revenue. The Starknet unit can focus on decentralisation and developer growth.

Revenue matters — even in crypto infrastructure

For years, Layer 2 networks have been judged largely on total value locked (TVL), transaction counts, and token price. The StarkWare situation is a reminder that sustainable fee revenue matters too. A major STRK token unlock of 127 million tokens is scheduled for April 15, 2026, representing 1.27% of the total supply and posing potential sell pressure on the token’s price. Structural revenue weakness, combined with token supply events, creates real headwinds. These pressures also align with broader market conditions discussed in the crypto market report Q1. 

What Comes Next

StarkWare is contracting to grow more effectively. The company still holds significant technical advantages — its STARK proof technology is genuinely cutting-edge, and a StarkWare researcher recently published an open-source scheme for quantum-safe Bitcoin transactions that operates within Bitcoin’s existing consensus rules, requiring no protocol upgrade. That kind of research output maintains long-term credibility even as short-term commercials struggle.

The challenge ahead is clear: Can Starknet regain momentum and rebuild its ecosystem under a more focused parent company? While a leaner StarkWare may act quickly and efficiently, long-term success will hinge on delivering value to users, attracting developers, and restoring confidence in the network’s future. The coming months will be decisive as the company executes on its new strategy in a transforming market.