Starknet launched Shadow Accounts on Oct. 14, enabling users to interact with DeFi applications through distinct wallet identities. Developed by StarkWare, the feature creates separate, persistent on-chain addresses for individual protocols.
Users fund these application-specific accounts using shielded balances held within Starknet's STRK20 privacy pool. Shadow Accounts obscure the direct connection between a user's primary wallet and their DeFi activity, allowing positions to be maintained under different on-chain identities.
Balances, transactions and positions of shadow accounts remain publicly visible on the blockchain. The feature obfuscates the association between wallet and activity, not transaction visibility.
Upon integration into a DeFi application, users connect their wallets and activate private mode. They deposit assets into a vault, where Shadow Accounts manage positions. Funds remain within application-specific accounts until withdrawal back into a shielded balance.
StarkWare said the functionality could expand beyond initial vault integrations to liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets and NFT marketplaces.
This follows StarkWare's June unveiling of the STRK20 privacy framework, which established capabilities for private transfers and shielded token balances on Starknet. That same month, StarkWare demonstrated a Private Know Your Customer system allowing users to complete identity verification without disclosing full identity documents on-chain.
