Starknet Upgrades to Privacy-Preserving Execution Layer

Starknet, an Ethereum Layer 2 validity rollup using STARK proofs computed off-chain and verified on-chain, has undergone significant upgrades in the first half of 2026. The network transitioned from a high-performance rollup into a privacy-preserving execution layer with the launch of STRK20, a protocol-level privacy framework.

STRK20 enables users to shield any ERC-20 asset into encrypted private balances and conduct confidential transfers, swaps, and DeFi interactions. Each shielded transaction costs a fixed 4 STRK, with an architecture that allows authorized third-party auditors to reconstruct specific user transaction histories for regulatory purposes without compromising uninvolved users' privacy.

The upgrade also introduced SNIP-36, which enables in-protocol proof verification allowing transactions to reference off-chain execution proofs directly. This is the technical prerequisite that makes STRK20 and strkBTC possible, confidential state transitions can now be validated by the network without exposing underlying balances or counterparties.