- Assets worth more than $65 million have been deposited on Starknet.
- Starknet continued to suffer from poor transaction throughput.
Launched in 2021, Ethereum’s [ETH] layer-2 solution (L2) Starknet has attracted a lot of attention in the first half of 2023. While still in its infancy, there was significant activity on the zero-knowledge rollup (zk-rollup).
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Deposits are rising
This is reported by the blockchain analysis company Nansen, more than 500,000 wallets have bridged to Starknet, depositing assets worth more than $65 million. As shown in the chart below, ETH was the most bridged asset, representing almost 75% of total bridged value (TVB).
Source: Nansen
Users transfer their assets to take advantage of the speed and cost-effectiveness of an L2 technology. The StarkGate bridge is used to transfer assets in the case of Starknet. Each supported token is associated with an L1 and L2 bridge contract that communicates through Starknet’s messaging mechanism.
Starkware, the company that developed Starknet, has set limits on the down payment amount and total value stipulated in the L1 bridging contract. An increase in deposit limits in mid-March resulted in a sharp rise in deposits. At the time of writing, ETH had the maximum limit of 80,000 of all assets.
Nansen also highlighted the age breakdown of wallet deposits, shedding light on some intriguing aspects of Starknet’s question. As revealed below, nearly 75% of these wallets were made in the last year, with a significant 41% in the 3-12 month age range. This indicated that Starknet’s demand was driven by newer entrants.
Source: Nansen
Still early days
Compared to other L2 solutions, Starknet was still in its infancy. According to a Dune dashboard, deposits to Starknet were still significantly less compared to established players such as Arbitrum [ARB] and optimism [OP] and even followed the recently launched zk rollup zkSync Era.
One reason for the poor growth could be that few transactions per second (TPS) are processed. Data from Dune highlighted that while the Ethereum mainnet processed an average of 11 TPS, the number of transactions on Starknet was less than one, a significantly low level for a rollup.
Source: Dune
However, Starknet tried to address this problem with the upcoming version 0.12.0. The upgrade is expected to reduce block execution time, significantly improving throughput and latency.