CIG Labs Lao Duo Seminar | StarkNet: The Hidden Fortune in a Bear Market
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CIG Labs Lao Duo Seminar | StarkNet: The Hidden Fortune in a Bear Market
StarkNet is gradually becoming the brightest gem in this race.
Navigating Web3 tides with focused insightsAuthor: Lao Duo Daniel, CIG Researcher (Twitter @LaoDuoEth)
Editor: Arain, Core Member of CIG (Twitter @arainqinqin)
Produced by CIG Labs
Ethereum's Layer 2 scaling solutions—from Optimistic Rollup to ZK Rollup, from Optimism and Arbitrum to zkSync and StarkNet—have consistently drawn the attention of investment firms, Web3 entrepreneurs, media, and airdrop hunters. Among them, StarkNet is gradually emerging as the brightest gem in this race.
On September 1st at 8 PM, Lao Duo Daniel hosted the "Web3 Alpha" Twitter Space series on CIG DAO, organizing a discussion around the theme "StarkNet: The Hidden Treasure in a Bear Market," inviting several guest speakers including Guo Yu, a former engineer from ByteDance and founder of CodeforDAO & Checks Finance; Bill, Co-Founder of MCN Ventures; and Leo Young, founder of the "StarkNet Chinese" community.
Given that the topic centers on uncovering hidden wealth during a bear market, how can we unlock StarkNet’s potential? After reading this article, we hope you'll have a clearer answer.
StarkNet is a permissionless, decentralized ZK Rollup (Zero-Knowledge Rollup) and an Ethereum Layer 2 scaling solution designed primarily to address Ethereum's limitations in scalability, slow transaction speeds, and high operating costs.
The team behind it has raised over $200 million in funding, with its most recent round being a $100 million Series D in May at an $8 billion valuation. Its angel round included Vitalik Buterin, followed by top-tier crypto and Web3 investors such as a16z, Paradigm, Binance Labs, and Alameda—all of whom participated in subsequent rounds.
Before launching StarkNet as a public Layer 2 scaling solution, Starkware first introduced StarkEx—an enterprise-focused, commercial-grade scaling engine. This B2B product serves as a scaling technology platform offering foundational components for Ethereum-based dApps. Notable projects built on StarkEx include the derivatives DEX dYdX, and NFT marketplaces Immutable X and Sorare.
The success of these projects on StarkEx has further fueled optimism and imagination about StarkNet’s future potential.
Below is a transcript of the "Web3 Alpha" discussion:
$8 Billion Valuation: StarkNet Has the Potential to Become the Most Powerful L2
Guo Yu shared that he became aware of StarkWare when TikTok’s Top Moments were launched on Immutable X—one of the successful applications built on StarkEx. “After all, StarkWare started with StarkEx to validate the feasibility of commercial network products before moving on to develop StarkNet as a public network. Therefore, although StarkNet has only existed for a few months and remains in its early stages, the success of StarkEx has already proven that the StarkWare team can deliver ZK Rollup scaling products—a success that greatly boosts investor confidence.”
StarkEx set a precedent, demonstrating the real scalability potential of ZK Rollups. Development teams working on native tools within the Ethereum ecosystem have also begun joining StarkWare’s developer community. Consensys is currently collaborating with StarkWare to build a Metamask Snap wallet compatible with StarkNet.
From a developer’s perspective, when choosing which chain to build on, Guo Yu emphasized minimizing transaction fees while ensuring trustworthiness, openness, and sufficient security. Given these criteria, his conclusion was clear: Layer 2 is the only viable option.
Moreover, StarkWare demonstrates long-term strategic thinking, which directly influences the developer experience.
For example, why did they choose to use Cairo as their smart contract language? Cairo supports an offline local execution environment similar to Python—possibly a preparatory step toward eventually open-sourcing validator nodes in the future.
Notably, StarkWare's forward-thinking approach is evident in their decision not to follow the trend of pursuing ZK EVM compatibility. While ZK EVM offers advantages—such as leveraging existing Ethereum ecosystem resources, supporting full Solidity instruction sets, and enabling faster development without learning new languages—it also brings technical constraints and legacy burdens. For instance, developers cannot use Solidity to write mathematical prover logic, whereas Cairo allows exactly that, freeing developers from EVM-related limitations. Thus, Guo Yu believes StarkWare’s vision with ZK VM is ahead of ZK EVM in certain aspects.
Bill noted that from an investor’s standpoint, zero-knowledge proof technology is extremely difficult and not something just any company can achieve.
In the short term, EVM-compatible chains like Optimistic Rollups may grow faster due to their ability to inherit Ethereum’s ecosystem. However, in the long run, ZK Rollups are more likely to prevail. SNARK technology is relatively mature, allowing zkSync to launch quickly—but SNARKs are vulnerable to quantum attacks. In contrast, STARK technology is less mature and mathematically more complex, leading to longer development timelines. Yet, STARKs are quantum-resistant, giving them a technological edge once fully developed.
Secondly, Bill admires the strength of StarkWare’s founding team—world-class scientists. Eli Ben-Sasson, a globally renowned cryptographer, co-invented two of today’s most widely used ZK systems: zk-SNARKs and zk-STARKs. He was also a founding scientist of Zcash, one of the earliest and most successful implementations of zero-knowledge proofs.
From a financial perspective, nearly every top-tier VC in the crypto space has invested in StarkWare. This means the company will continue receiving strong support—not just capital, but also access to portfolio ecosystems, partnership opportunities, and talent networks from these VCs.
In summary, with exceptional team, talent, funding, and technology, Bill believes StarkNet could become the largest L2 in the Ethereum ecosystem.
Leo added that besides Eli Ben-Sasson, CEO Uri Kolodny is another key figure—a serial entrepreneur who handles business strategy and complements Eli well. “The entire StarkWare team now has over 70 members, more than 50 of whom are engineers. Their technical execution capability is exceptionally strong.”
Key StarkNet Ecosystem Developments and Projects to Watch
Leo reviewed some key milestones and developments worth watching in the StarkNet ecosystem:
In June 2021, StarkNet launched its testnet, followed by mainnet deployment in November—though initially only by application. Then in April this year, the decentralized cross-chain bridge StarkGate went live.
A major milestone is expected in Q4 this year: state reset. This will effectively reboot the mainnet, clearing redundant code and improving performance.
This upgrade will require migration of project contracts and secure transfer of user assets. Once completed, StarkNet will achieve over 10x scalability improvements compared to Ethereum.
Decentralization next year will be advanced through token incentives for sequencers and provers, helping avoid centralized control and censorship risks in the future.
However, Bill pointed out that projects on StarkNet are still very early-stage—core DeFi infrastructure like DEXs, lending protocols, and stablecoins remain underdeveloped.
Additionally, the requirement to use Cairo—a new programming language—means major Ethereum-native DeFi projects such as Uniswap, Compound, and MakerDAO have not yet migrated to StarkNet.
Overall, the StarkNet ecosystem is still in its infancy.
“AAVE, MakerDAO, and other Ethereum infrastructure projects have already prepared contract designs compatible with StarkNet and plan to deploy after the mainnet reset. Many DEX projects are already in testing phases. StarkNet actively encourages innovation in native L2 projects rather than mere replication of existing Ethereum dApps,” Leo补充回应道。
Bill is particularly interested in gaming projects on StarkNet, since games involve frequent interactions and generate large volumes of data. StarkNet’s high throughput enables heavy computation off-chain while only verifying results on-chain—significantly reducing costs and enhancing user experience.
Promising examples include Isaac, a game developed by Topology based on Liu Cixin’s works, and infrastructure tools being built by MatchBox DAO in collaboration with game developers—such as plugin modules for contract wallets.
Guo Yu observed that even dominant players like Arbitrum, or those that have already distributed airdrops like Optimism, along with StarkNet—which currently hosts few mainnet projects—all have extremely low daily active users, possibly only hundreds or thousands per project. These numbers are negligible by Web2 standards. “In Web2, a project needs at least millions of DAUs to receive corporate backing or attention. I hope to see more Web3 projects engage with the real world, understand genuine user needs, and build solutions addressing actual pain points in people’s lives.”
StarkNet Token Launch and Airdrop Expectations
Among the four major L2s, Optimism has already taken the lead in launching its token.
StarkNet has explicitly stated in its official Medium articles that it will issue a TOKEN, which will replace ETH for transaction fees, and also be used for staking and governance voting.
According to Bill’s interpretation, StarkNet will initially distribute 10 billion tokens among investors, the core team, developers, contributors, and users. Token distribution will be based on user spending within projects, though the incentive amount is unlikely to exceed actual spending. Additionally, similar to other blockchains, selected ecosystem projects may receive separate subsidy rewards in tokens.
“Users participating in ecosystem projects can earn airdrops. However, official anti-sybil measures will be implemented, meaning only authentic user behavior will be rewarded. Only loyal users with significant transaction volume and value will qualify for airdrops,” Bill said.
Leo added that the decentralization proposal includes two parts: a foundation and the token itself. The foundation will operate as a non-profit organization maintaining StarkNet as a public good. The initial token supply is set at 10 billion, to be used for governance and transaction fees. While other L2s currently use ETH for gas, StarkNet plans to use its own token. Additional tokens will reward consensus participants—future decentralized sequencers and provers—who play a critical role in network decentralization.
Airdrops will likely prioritize incentivizing developers, as the current focus is encouraging innovation and quality project development within the ecosystem. Over-allocating rewards to users might result in short-term speculation, where recipients sell immediately after receiving tokens—potentially harming long-term growth.
For user incentives, there may be a limited airdrop for early adopters. Additionally, 9% of the token allocation will reimburse part of the fees incurred when users transfer funds from Ethereum to StarkNet—though exact rebate rules haven't been announced yet. Finally, 8.1% remains unallocated, pending future community proposals.
Those interested in StarkNet’s detailed tokenomics can refer to the official article.
Finally, Lao Duo Daniel and the guests discussed specific strategies for qualifying for potential airdrops and opened an AMA session answering audience questions. If you’re interested in these topics and want deeper insights into StarkNet’s current ecosystem and roadmap, feel free to listen to the full Twitter Space recording. Visit @CIG_DAO on Twitter for the replay, or click here.
Lao Duo believes we are still in the early days of major L2 development. StarkNet’s overall ecosystem won’t begin taking shape until after the mainnet reset in Q4 this year. Lastly, the Web3 Alpha Twitter Space—a nonprofit research series hosted by Lao Duo—takes place every Thursday. Feel free to suggest topics via his Twitter account.
Disclaimer:All content discussed in this article is for informational and academic purposes only and should not be considered financial or investment advice.
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