Starknet has introduced STRK20, a new token standard designed to bring native privacy to ERC-20 assets on the network, allowing balances and transfers to remain hidden while still enabling interaction with decentralized finance protocols.
The launch aims to address one of the long-standing limitations of public blockchains. Every transaction on a typical network exposes the wallet address, amount, counterparty, and timestamp on a permanent public ledger. While transparency is core to blockchain design, it has also discouraged enterprises and institutions from adopting onchain financial systems.
STRK20 enables any ERC-20 token on Starknet to operate with private balances and transfers by default. Instead of relying on wrapped assets or separate privacy layers, the feature is integrated directly at the token level.
The system is built around the Starknet Privacy Pool. Users deposit tokens into the pool, conduct transactions privately within it, and withdraw when needed.
Transfers inside the pool reveal no information about the sender, receiver, or amount to outside observers. Each transaction is verified using zero-knowledge proofs, ensuring validity without exposing sensitive data.
The architecture is designed to preserve composability with the broader DeFi ecosystem. Starknet said STRK20 tokens will support features such as anonymous swaps and staking from launch.
One of the first integrations will be with the decentralized exchange Ekubo. Users will be able to swap tokens directly from the privacy pool without linking their wallet address to the trade. While the trade’s effect on liquidity pools remains visible, the identity of the trader is hidden.
The system will also enable anonymous staking. Users can swap into liquid staking tokens and establish staking positions without exposing their wallet address onchain, reducing the ability for outside observers to track holdings over time.
STRK20 is built on Starknet’s zero-knowledge architecture and Cairo programming language, allowing private transactions to use the same infrastructure that validates the network’s blocks. Proofs are generated on the client side and verified by Starknet’s sequencer.
The system also introduces a compliance mechanism. Users entering the Starknet Privacy Pool register an encrypted viewing key that can be decrypted by a designated auditor if legally required, enabling regulators to trace that user’s activity without exposing other participants.
Source: https://cryptobriefing.com/strk20-privacy-token-standard/
