Starknet hits ‘Stage 1’ decentralization, tops ZK-rollups for value locked

Starknet, an Ethereum layer-2 scaling platform, has achieved a significant decentralization milestone, becoming the largest zero-knowledge (ZK) rollup network by total value locked (TVL). This milestone, “Stage 1” decentralization, aligns with a framework proposed by Ethereum co-founder Vitalik Buterin in 2022. It signifies a reduction in centralized oversight, transitioning the network towards greater autonomy.

Starknet’s achievement involved establishing a security council and implementing censorship-resistance mechanisms. While the security council retains some oversight, a fully functional, smart-contract-governed validity proof system is now in place. This makes Starknet the only ZK-rollup layer-2 network to reach Stage 1, boasting a TVL of $629 million, surpassing ZKsync’s $610 million. However, it ranks fifth overall in TVL among layer-2 networks, behind four Optimistic rollup-based networks, all of which also achieved Stage 1 using fraud proofs.

The difference between fraud and validity proofs is crucial. Fraud proofs assume transactions are invalid until proven otherwise, while validity proofs require cryptographic evidence to confirm validity. StarkWare, Starknet’s developer, aims for “Stage 2” decentralization—complete autonomy and community governance—and is also exploring applications on Bitcoin. Currently, only three smaller layer-2 platforms have reached this stage.

Buterin’s “training wheels” framework outlines three stages for Ethereum scaling rollup projects. Base, Coinbase’s layer-2 network, currently dominates the sector with $14.7 billion in TVL (33% market share), significantly exceeding Starknet’s 1.4% share. The total TVL across the layer-2 ecosystem is $44.2 billion, a figure influenced by Ether’s price fluctuations and showing a 20% decrease year-to-date. Starknet’s progress represents a key advancement in layer-2 scaling solutions and the broader development of decentralized networks.