Starknet launched its Shadow Accounts privacy feature on Oct. 14, enabling users to interact with DeFi applications without publicly linking activity to main wallets.
The Ethereum layer-2 generates separate, persistent addresses for individual protocols. Users fund these accounts by drawing from shielded balances held within Starknet's STRK20 privacy pool, allowing positions across lending, trading, and other DeFi activity under distinct onchain identities.
Shadow Accounts obscure the connection between the application-specific address and the wallet that funded it. However, all balances, transactions, and positions remain publicly visible onchain—maintaining transparency while enhancing privacy from a wallet-linking perspective.
Once a DeFi application integrates the feature, users connect their wallets and activate private mode, then deposit assets into a vault. Shadow Accounts manage these positions until funds are withdrawn back into a shielded balance.
StarkWare indicated the functionality could expand beyond vault operations to liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets, and NFT marketplaces.
The launch builds on StarkWare's June introduction of the STRK20 privacy framework, which facilitates private transfers and shielded token balances directly on Starknet. The company also demonstrated a Private Know Your Customer system in June, allowing users to verify personal information for compliance without revealing full identity documents onchain.
