Starknet launches wallet privacy feature for DeFi activity

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Starknet wallet privacy for DeFi

Highlights

StarkWare launched Shadow Accounts on Starknet, letting DeFi users create separate persistent addresses and shield onchain identities via STRK20 privacy pools.
Balances, transactions, and DeFi positions in Shadow Accounts remain publicly visible, but the funding wallet's link is obscured until assets return to shielded balances.
The Shadow Accounts feature follows June's STRK20 privacy framework rollout and a Private Know Your Customer system, highlighting a wider Starknet privacy strategy.

Shadow Accounts rollout for DeFi users

As reported by Cointelegraph, citing StarkWare, the new Shadow Accounts feature creates separate persistent addresses for individual applications, allowing users to keep lending, trading and other DeFi positions under different onchain identities. Users fund those accounts through shielded balances held in Starknet’s STRK20 privacy pool, while the link between the shadow account and the wallet providing funds is obscured.

Starknet says balances, transactions and positions tied to Shadow Accounts still remain publicly visible onchain. Once a DeFi application integrates the tool, users can connect their wallets, switch from public to private mode and deposit assets into a vault, after which the Shadow Accounts maintain positions until funds are withdrawn back into a shielded balance.

StarkWare says the functionality could eventually expand beyond vault-based use cases to liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets and NFT marketplaces.

Broader privacy strategy across Starknet

The launch follows a wider privacy push by StarkWare on Starknet. In June, the company introduced its STRK20 privacy framework, which enables private transfers and shielded token balances on the network.

Later that month, StarkWare also demonstrated a Private Know Your Customer system designed to let users verify personal information without exposing full identity documents. Together, those efforts signal a broader attempt to build privacy-preserving infrastructure for crypto users while keeping key transaction data visible onchain.

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