Starknet unveils Shieldnet for enhanced privacy in DeFi

Starknet is betting big on privacy. The Ethereum Layer 2 network has rebranded its growing suite of privacy tools under the “Shieldnet” banner, signaling that anonymous DeFi isn’t just a feature anymore. It’s the whole identity.

At the center of this push is the STRK20 framework, a protocol that lets users hold shielded balances, execute private transfers, and interact with DeFi platforms without broadcasting their financial activity to the entire blockchain. For ERC-20 tokens on Starknet, the days of fully transparent wallet balances may be numbered.

What Shieldnet actually does

The framework launched following Starknet’s Shinobi upgrade on April 21, 2026. It allows users to wrap standard ERC-20 tokens into shielded versions, conduct transfers that don’t reveal balances or counterparties, and interact with lending, swapping, and staking protocols anonymously.

STRK20 includes selective compliance features like viewing keys. These allow users to voluntarily disclose transaction details to specific parties, such as auditors or tax authorities, without making that information public on-chain.

Wallets like Xverse and Ready already support these privacy tools, letting users perform anonymous swaps, lending, and staking directly from their interfaces.

strkBTC: shielded Bitcoin on an Ethereum L2

The headline product of the Shieldnet initiative is strkBTC, a shielded Bitcoin wrapper that went live on May 12, 2026. Each strkBTC token is pegged 1:1 to actual Bitcoin, meaning holders get exposure to BTC’s price while keeping their balances and transactions private on Starknet.

strkBTC also includes quantum-resistant security properties, building resistance to future cryptographic threats into the asset’s architecture from day one.

The numbers behind Starknet’s momentum

Starknet currently holds approximately $655 million in total value locked and supports around 47,000 daily active users.

Starknet’s underlying technology gives it structural advantages in the privacy race. As a ZK-rollup, it already generates zero-knowledge proofs for every batch of transactions submitted to Ethereum. The network also supports account abstraction, meaning wallets can be programmed with custom logic, including privacy-preserving features, without requiring changes to the base protocol.