Starknet Launches Shadow Accounts to Unlink Main Wallets From DeFi Activity

Ethereum $ETH layer-2 network Starknet $STRK has launched a wallet privacy feature called Shadow Accounts, enabling users to interact with decentralized finance applications without publicly linking the activity to their primary wallets. Developed by StarkWare, the feature generates separate, persistent addresses for individual applications that users can fund through shielded balances held in the network's STRK20 privacy pool. While the connection between the funding wallet and the shadow account is obscured, the balances, transactions, and positions held by the shadow accounts remain publicly visible onchain. Once integrated into a DeFi app, users can switch from public to private mode to deposit assets into a vault, maintaining their positions until they withdraw funds back into a shielded balance. StarkWare stated that the capability could eventually expand beyond vaults to support lending, borrowing, liquidity provision, staking, derivatives trading, prediction markets, and NFT marketplaces, building on its June rollout of the STRK20 privacy framework and a Private Know Your Customer demonstration.