Key facts
- Starknet's new Shadow Accounts feature allows users to interact with DeFi apps without linking activity to their main wallets.
- Shadow Accounts create separate, persistent addresses for individual applications.
- Users can fund Shadow Accounts using shielded balances from Starknet's STRK20 privacy pool.
- Balances and transactions of Shadow Accounts remain publicly visible onchain.
- The feature can be integrated into DeFi applications, allowing users to deposit assets into a vault in private mode.
- StarkWare stated the functionality could extend to liquidity provision, lending, borrowing, staking, derivatives, prediction markets, and NFT marketplaces.
The Ethereum layer-2 network Starknet has introduced a new privacy feature called Shadow Accounts, which aims to allow users to engage with decentralized finance (DeFi) applications without publicly associating their activities with their primary wallets. Developed by StarkWare, the team behind Starknet, this feature creates distinct, persistent addresses for each application a user interacts with.
Users can fund these Shadow Accounts using shielded balances from Starknet's STRK20 privacy pool, enabling them to manage DeFi positions like lending or trading under different onchain identities. While the connection between the Shadow Account and the funding wallet is obscured, Starknet notes that the balances, transactions, and positions within these accounts remain visible on the blockchain.
Once integrated into a DeFi application, the feature allows users to connect their wallets, opt for private mode, and deposit assets into a vault. Their Shadow Accounts will then manage these positions until the funds are withdrawn back into a shielded balance. StarkWare indicated that this functionality could be expanded to cover a wider range of DeFi activities, including liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets, and NFT marketplaces.