Starknet introduces STRK20 privacy infrastructure for ERC-20 tokens

Starknet (STRK) unveiled STRK20 on Tuesday, a new infrastructure designed to add privacy functionality to ERC-20 tokens deployed on its network.

The framework allows token issuers to deploy assets with built-in privacy features while maintaining compatibility with the broader Ethereum (ETH) ecosystem. The development aims to address transaction transparency, a long-standing drawback of institutional adoption of public blockchains.

STRK20 to provide privacy features for ERC-20 tokens

Starknet claims STRK20 will enable token issuers to incorporate confidential balances and private transfers into ERC-20 tokens at the protocol level.

Users will be able to shield tokens, hold private balances and perform encrypted transactions. The framework also allows users to move assets between private and public states without converting them into separate wrapped tokens.

Starknet noted that STRK20 will launch with early integrations to demonstrate its potential use cases in the decentralized finance (DeFi) ecosystem. The initial applications include private swaps on the Ekubo Protocol and anonymous staking options for assets such as Bitcoin (BTC) and STRK. Developers within the ecosystem are also exploring additional DeFi applications built on top of the infrastructure.

Starknet added that STRK20 is designed to be compliance-ready. It includes a selective disclosure mechanism that allows users to share transaction details with auditors, regulators, or accountants when legally required, while keeping those details private by default.

The approach is intended to balance confidentiality with regulatory oversight, allowing both individual users and institutions to maintain privacy while preserving an audit trail when necessary.

Following the announcement, STRK rose to $0.039, up 2% over the past 24 hours at the time of publication on Tuesday.