By Tom Whitfield

Starknet, the Ethereum layer-2 network developed by StarkWare, has launched a wallet privacy feature called Shadow Accounts that lets users interact with DeFi applications without publicly linking activity to their main wallets. The feature went live this week, according to an announcement from the StarkWare team.

Shadow Accounts create separate, persistent addresses for individual applications, StarkWare said. Users fund these addresses from shielded balances held in Starknet's STRK20 privacy pool, allowing lending, trading and other DeFi positions to operate under distinct onchain identities.

What do Shadow Accounts actually hide?

The privacy boundary is narrow. The feature obscures the connection between a shadow account and the wallet that funds it, but the shadow account's balances, transactions and positions remain publicly visible onchain, Starknet confirmed.

That positions the product between full transaction privacy and ordinary pseudonymous addressing. A user can hold a DeFi position without an observer tracing it back to a primary wallet, yet anyone can still inspect the position itself on the Starknet ledger.

The workflow runs through the applications themselves. Once integrated, users connect their wallets, switch from public to private mode and deposit assets into a vault. The Shadow Account maintains the position until the user withdraws funds back into a shielded balance.

How does this fit StarkWare's privacy roadmap?

The launch extends StarkWare's privacy stack, which the company has built out in stages this year. In June, StarkWare introduced the STRK20 privacy framework, enabling private transfers and shielded token balances on Starknet. Shadow Accounts draw directly on that infrastructure for funding.

Later that month, the company demonstrated a Private Know Your Customer system, letting users verify personal information without revealing full identity documents. Together, the three releases map a strategy of composable privacy primitives rather than a single privacy product.

StarkWare said the Shadow Account functionality could eventually extend beyond vaults to a wider set of DeFi use cases, including:

• liquidity provision
• lending and borrowing
• staking
• derivatives trading
• prediction markets
• NFT marketplaces

The company has not published a timeline for those integrations. Adoption will depend on whether DeFi protocols building on Starknet implement the connection flow, since the feature requires application-level integration for users to switch between public and private modes.

The operational stakes are concrete for Starknet's ecosystem. Wallets and front ends will need to support shielded-balance funding flows, and DeFi protocols must weigh whether persistent per-application addresses complicate risk monitoring or liquidation logic. For users, the model trades full privacy for unlinkability at the funding layer, keeping all position data auditable onchain.

StarkWare has also unveiled a quantum-resistance roadmap for Starknet, signalling that privacy tooling and long-term cryptographic upgrades now sit on the same development track. The next measurable milestone for Shadow Accounts will be the first wave of third-party DeFi integrations beyond vault deposits.