Starknet Surges as Privacy Rotation Meets Zero-Knowledge Momentum

That tailwind, reinforced by Vitalik Buterin’s unveiling of Kohaku (Ethereum’s most significant privacy-preserving framework upgrade), has pushed Starknet (STRK) back to the forefront as the flagship ZK rollup.

Over the month, STRK initially surged as much as +190.55% from the lows before a heavy end-of-week sell-off trimmed gains. The token is now sitting at +46.75% on a monthly basis. Even with the pullback, STRK remained one of the few Ethereum rollups able to preserve upward momentum amid the sector-wide capital pivot and privacy-driven rotation.

STRK reclaimed the $1bn market-cap mark and overtook both Arbitrum and Optimism to become the most capitalized Layer 2 on Ethereum. The rally came alongside a sharp acceleration in market activity: on 19 Nov, futures volume spiked to a record $1.84bn, while spot markets added $426m in trading volume. Open interest surged from $29.8m at the October lows to $143m today, a +380% increase, underscoring the intensity of speculative inflows behind Starknet’s move.

(Source: CoinMetrics)

Starknet’s Critical Positioning in the Privacy-ZK Convergence 

Starknet is a ZK rollup powered by STARK proofs, ultra-scalable, post-quantum secure, and designed to verify computation cheaply on Ethereum L1. It remains the only ZK rollup to have reached Ethereum’s "Stage 1" maturity designation (partial decentralization, independent proof verification, and trust-minimized operation guarantees), placing it ahead of other L2s still in more centralized stages.

But its relevance in the privacy cycle runs deeper. Zcash and Starknet share the same co-founder, Eli Ben-Sasson, and the same cryptographic DNA. As privacy narratives rotate back, Starknet sits at the intersection of the oldest proven ZK privacy technology (ZEC) and the most advanced ZK scalability stack on Ethereum. With Ethereum moving toward native privacy primitives through Kohaku, Starknet becomes the network most aligned with this future shift, both technologically and culturally.

A Strategic Pivot: BitcoinFi Landed on Starknet 

Following the Grinta upgrade’s foundational infrastructure changes in September, Starknet rolled out its Bitcoin staking integration. This opened a new frontier by introducing network dual staking secured by both STRK and Bitcoin.

The system is designed to preserve decentralization. Bitcoin’s influence within Starknet’s consensus is deliberately limited, with BTC-based staking constrained to a maximum of 25% of total consensus weight to prevent any asset other than STRK from dominating the network governance. Starknet is actively working to offer Bitcoin users Ethereum-grade scale, smoother UX, and deeper liquidity through a growing suite of products and integration programmes, positioning the network as one of the most Bitcoin-accessible L2s in the ecosystem.

As Anchorage Digital expanded support with Bitcoin staking on Starknet (enabling institutional clients to earn yields through its regulated custody infrastructure), the company highlighted that Digital Asset Trusts (DATs) may become "early adopters" of BitcoinFi and a strong growth driver. Facing mounting pressure, DATs are looking for ways to make their Bitcoin holdings productive, adding a new returns layer on top of traditional Bitcoin passive accumulation.

Economics and TVL

Starknet’s economics are compelling. $125mn in BTC has been staked on Starknet since September, lifting the network’s consensus value over $340m in assets pledged to validate the network’s state if we account for the STRK contribution. STRK’s Total Value Locked (TVL) crossed the $1bn milestone, sitting at $1.11bn after rising +110.1% since September, positioning Starknet as the fourth largest Ethereum Layer 2 by value locked.

(Source: L2Beat)

These metrics highlight how BitcoinFi has become a distinctive and durable demand driver, giving Starknet a clear advantage at a time when Ethereum L2s are locked in an intensifying battle for liquidity and user commitment. As onchain activity accelerated, fee generation followed. Cumulative fees surged +183% since September, as per Token Terminal metrics.

(Source: Token Terminal)

Under the Hood: Technical Upgrades Driving Momentum 

Starknet’s recent outperformance isn’t just narrative-driven but also underpinned by the most significant technical upgrades the network has shipped since launch. Earlier this month, StarkWare deployed the next-generation Stwo prover. This upgrade delivers up to 10x faster proof generation, sharply reduces L1 verification costs, and boosts overall throughput.

Crucially, Stwo also enables real-time private proofs on consumer devices. This opens the door to new categories such as private DeFi, anonymous identity, and high-frequency ZK applications, all directly aligned with the renewed privacy cycle.

Alongside this, the upcoming Starknet v0.14.1 release brings a series of targeted optimizations designed to improve speed and fee efficiency. The network is transitioning to BLAKE-based CASM hashing, closing blocks faster during low activity for more predictable fees, and adopting SNIP-34 to achieve more consistent block packing. Together, these upgrades quietly but materially enhance throughput and user experience, ensuring Starknet can scale smoothly as ZK-powered activity accelerates.