Starknet lets DeFi users hide their main wallets

Ethereum layer-2 network Starknet has launched Shadow Accounts, a new privacy feature that allows users to trade, lend and manage decentralized finance (DeFi) positions without publicly connecting their activity to their main cryptocurrency wallets.

StarkWare announced the launch on October 13, introducing a system that creates separate blockchain addresses for individual DeFi applications. Built on the network’s STRK20 privacy framework, the feature lets users maintain ongoing positions under different identities while keeping their main wallet addresses obscured. The company confirmed that Shadow Account balances and transactions remain visible onchain.

Starknet Shadow Accounts separate DeFi activity from wallets

With Shadow Accounts, users can interact with supported decentralized applications through dedicated addresses that are not publicly linked to their primary wallets. Each application receives a separate, persistent identity, allowing users to return to existing positions without revealing connections to other activities.

StarkWare explained that using the same public wallet across multiple platforms allows blockchain observers to examine transactions, holdings and trading strategies associated with that address. Shadow Accounts are designed to prevent observers from easily combining those activities into a single publicly connected wallet history.

Unlike temporary wallet addresses, Shadow Accounts remain available across multiple interactions with the same application. Users can maintain lending positions, accumulate rewards or manage other financial arrangements through a consistent address.

The system derives each account from information associated with the user, the selected application and a unique identifier known as a nonce. According to the official Starknet.js documentation, users can generate multiple Shadow Accounts for one application, allowing them to separate different activities within the same service.

However, the protection has defined limits. StarkWare states that Shadow Accounts hold public ERC-20 assets, meaning their balances and transaction histories remain accessible through blockchain explorers. The privacy protection concerns the connection between those addresses and the user’s main wallet.

The feature therefore does not make every trading position, token transfer or financial activity invisible. Once an observer identifies a particular Shadow Account, its publicly recorded operations can still be examined.

Shadow Accounts use STRK20 to fund DeFi transactions

The system works alongside STRK20, Starknet’s privacy framework for cryptocurrency transfers and shielded balances. Users deposit supported assets into a shared privacy pool, where their balances are represented through encrypted records.

According to StarkWare’s technical explanation, a user connecting to a compatible application can select a private operating mode before making a deposit. The wallet then moves the required assets from the shielded balance to the designated Shadow Account.

Once funded, the account can interact with the application and maintain an ongoing position. For example, a user participating in a lending platform could deposit assets through a Shadow Account and return later to adjust the position.

The process allows the application to recognize the same account across multiple transactions. However, the user’s original wallet address is not publicly attached to those activities through the Shadow Account mechanism.

When users decide to withdraw, supported proceeds can move back into their shielded STRK20 balances. The wallet manages the required transaction data and generates zero-knowledge proofs used to validate operations through the privacy system.

Starknet’s documentation identifies several ways to collect assets from a Shadow Account. Developers can configure transactions to return the entire token balance, only amounts received during the latest interaction or a specified amount.

The mechanism uses a Shadow Account anonymizer, which can create and operate the account through the privacy pool. The official documentation identifies an anonymizer contract deployed on Starknet mainnet, alongside a separate deployment on the Sepolia test network.

StarkWare opens privacy tools to DeFi developers

StarkWare has made Shadow Accounts available through the Starknet Wallet API, allowing developers to connect existing applications to the privacy system.

The company identified the shadow_account_invoke method as the main integration tool. Through this operation, developers can submit application calls using a user’s Shadow Account without directly managing the account’s private state.

According to the launch announcement, the wallet handles proof generation, transaction submission and the data required to manage the user’s shielded balances. Developers do not need access to users’ viewing keys to enable the feature.

The announcement identified Starknet Wallet API version 0.10.4 and starknet.js version 10.8.0 or newer as supported integration options. Wallet compatibility remains necessary, meaning the feature will depend on whether individual wallets and applications implement the relevant interfaces.

StarkWare said the design could eventually support additional services, including liquidity provision, borrowing, staking, recurring purchases, derivatives, prediction markets and NFT marketplaces.

The developer documentation distinguishes Shadow Accounts from single-use transaction helpers. Shadow Accounts are designed for positions held over time, while helper-based interactions can complete a transaction without maintaining a persistent user-specific address.

No figures were disclosed for the number of applications that had integrated Shadow Accounts at launch. StarkWare did not publish adoption targets or transaction volumes associated specifically with the new feature.

Starknet expands privacy services after STRK20 launch

Shadow Accounts extend StarkWare’s existing work on blockchain privacy, which received a major update in June 2026.

On June 9, StarkWare introduced STRK20, a framework designed to provide shielded balances and private transfers for supported ERC-20 assets on Starknet. The system uses zero-knowledge proofs to validate transactions without publicly exposing all the underlying financial information.

The earlier STRK20 privacy framework for Ethereum tokens introduced encrypted balances, private transfers and viewing keys for controlled disclosure. Through its shared privacy pool, users can move supported assets between public and shielded states while remaining on Starknet.

Subsequently, StarkWare demonstrated a Private Know Your Customer system on June 23. The technology was designed to allow users to verify selected personal information without providing companies with complete copies of their identity documents.

The Private KYC system developed by StarkWare uses zero-knowledge proofs to verify specific information, such as age or eligibility, while limiting exposure of other personal details. The demonstration involved passport verification using mobile devices and encrypted identity information.

StarkWare’s official STRK20 website identifies Ready and Xverse among the wallets supporting its privacy infrastructure. The platform describes existing integrations involving decentralized exchanges, lending applications and other financial services.

Its documentation explains that privacy protections do not cover every part of a blockchain transaction. Public deposits, withdrawals, transaction timing and external application activity can remain visible, depending on the wallet and integration.

The framework provides a mechanism for authorized auditing through encrypted viewing keys. According to StarkWare, this allows designated auditors to inspect an individual’s private transfer records without gaining control of their assets.

The latest developer documentation identifies WalletAccountV6 as the recommended interface for new Starknet applications using STRK20 features. It specifies compatibility with get-starknet version 6.0.6 or later and describes support through compatible wallets, including Ready and Xverse.