Starknet has introduced STRK20, a privacy framework for ERC-20-like assets on its Ethereum layer 2 network. The framework allows for confidential balances and transfers, hiding sender, receiver, and transaction amounts from public view. It supports DeFi operations, including lending, staking, and swaps, while maintaining privacy.
Compliance is managed through viewing keys for auditors and selective disclosure, which allows users to verify specific transaction data without full exposure. The first asset to utilize STRK20 is strkBTC, a shielded version of Bitcoin. The foundation for this framework was established in April 2026 with the Starknet v0.14.2 upgrade and the SNIP-36 proposal.
Separately, the Ztarknet project is in development to bring Starknet’s execution engine to Zcash as a layer 2 solution. The testnet launched in November 2025, demonstrating STARK proof verification. Ztarknet utilizes the Madara sequencer and Stwo prover, with ZEC used for settlement fees on the Zcash base layer, without altering existing shielded pools.
Industry figures Eli Ben-Sasson and Zooko Wilcox are involved in both initiatives. The projects aim to address regulatory compliance concerns for privacy-focused assets, potentially increasing institutional interest as global privacy regulations evolve.
