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ZEC $1,243 Starknet launches Shadow Accounts for private DeFi trading
Starknet users can now hide DeFi activity links from their main wallets through separate, persistent blockchain addresses.
Key takeaways
- Privacy with visibility. Shadow Accounts hide which main wallet funds them, but balances and transactions stay publicly visible onchain.
- Coming to more apps. The feature currently centers on vaults but could eventually reach lending, borrowing, staking, derivatives trading, prediction markets and NFT marketplaces.
- Part of broader effort. StarkWare introduced its STRK20 privacy framework in June and later demonstrated a Private Know Your Customer system.
What happened
Starknet launched Shadow Accounts, a privacy tool that lets users engage with decentralized finance without publicly connecting that activity to their main wallets. The feature creates separate, persistent addresses for each application a user interacts with. Users fund these Shadow Accounts using shielded balances held in Starknet's STRK20 privacy pool.
Once a DeFi app integrates Shadow Accounts, users connect their wallets and switch from public to private mode. They deposit assets into a vault, and the Shadow Account holds their positions until they withdraw funds back into a shielded balance. This setup allows users to maintain lending, trading and other DeFi positions under different onchain identities.
The privacy feature has limits. Balances, transactions and positions of Shadow Accounts remain publicly visible onchain. What stays hidden is the connection between the Shadow Account and the wallet funding it.
First $0.0419Latest $0.0785+87.2% over the period
Points are daily observations, not closing prices.
Why it matters
Privacy in DeFi reduces exposure of financial activity while users interact with applications. Shadow Accounts let traders and liquidity providers keep positions under different identities without fully obscuring onchain activity. StarkWare positioned this as part of a broader push to give DeFi apps a private mode option.
The feature could expand significantly beyond vaults. StarkWare said functionality could eventually extend to liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets and NFT marketplaces. This expansion would let users apply privacy across most major DeFi use cases.
Background
Shadow Accounts build on StarkWare's broader 2026 privacy initiative. In June, StarkWare introduced its STRK20 privacy framework, which allows private transfers and shielded token balances on Starknet. The company later demonstrated a Private Know Your Customer system that lets users verify personal information without revealing full identity documents.
Questions readers ask
What is a Shadow Account on Starknet?
A Shadow Account is a separate, persistent blockchain address that lets users interact with DeFi apps without publicly linking that activity to their main wallet. Users fund Shadow Accounts with shielded balances and maintain positions under different onchain identities.
Is activity on a Shadow Account completely private?
No. Shadow Accounts hide the connection between the account and the wallet funding it, but balances, transactions and positions remain publicly visible onchain.
Where can I use Shadow Accounts?
Shadow Accounts currently work with DeFi apps that have integrated the feature. StarkWare said functionality could eventually extend to liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets and NFT marketplaces.
What is the STRK20 privacy framework?
Introduced in June by StarkWare, the STRK20 privacy framework allows private transfers and shielded token balances on Starknet. Shadow Accounts are funded through the network's STRK20 privacy pool.
