The Decline of StarkNet’s TVL
The total value locked (TVL) in Starknet, a layer-2 scaling solution for Ethereum, has dropped nearly 50% according to L2Beat data on August 21. The TVL currently stands at around $98 million, down from over $203 million on August 16. The decline in StarkNet’s TVL is one of the fastest in the layer-2 scene.
Key Points:
- Starknet utilizes zero-knowledge (ZK) in its rollups, providing better privacy for transactions.
- StarkNet’s transaction processing speed (TPS) is lower than Ethereum’s, but its activity has been steadily increasing.
- Ethereum’s TPS remains steady while StarkNet’s has been increasing, indicating the platform’s ability to adjust throughput as activity spikes.
- The decline in StarkNet’s TVL may be correlated with the recent drop in Ethereum prices and on-chain activity.
- StarkNet recently decentralized its feeder gateway, improving reliability and security.
Hot Take:
The sharp decline in StarkNet’s TVL is concerning, especially considering the rapid growth of layer-2 solutions in the Ethereum ecosystem. It remains to be seen whether this is a temporary setback or a sign of larger issues with the platform. The correlation with Ethereum’s price drop suggests that market conditions may have played a role. However, the recent decentralization of the feeder gateway and improvements to functionality indicate that StarkNet is actively working to enhance user experience and address potential vulnerabilities.
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