Starknet launches Shadow Accounts to hide DeFi wallet connections
Starknet introduces wallet privacy for DeFi
Starknet, an Ethereum layer-2 network, has launched a new privacy feature called Shadow Accounts. The tool lets users interact with decentralized finance apps without their activity being publicly tied to their main wallet address.
StarkWare, the company behind Starknet, said the feature creates separate persistent addresses for each application a user interacts with. Users can fund these shadow accounts using shielded balances held in the network's STRK20 privacy pool. A shielded balance is a private balance that hides the sender, receiver, and amount from public view.
The connection between the shadow account and the wallet funding it is obscured. However, the balances, transactions, and positions of shadow accounts remain visible on the public blockchain.
How Shadow Accounts work
Once a DeFi application integrates the feature, users can connect their main wallet, switch from public to private mode, and deposit assets into a vault. Their shadow account then holds the position until the user withdraws funds back into a shielded balance.
StarkWare said the functionality could eventually expand beyond vaults to support liquidity provision, lending, borrowing, staking, derivatives trading, prediction markets, and NFT marketplaces.
Part of a broader privacy push
The launch follows other privacy initiatives from StarkWare earlier in 2026. In June, the company introduced its STRK20 privacy framework, which enables private token transfers and shielded balances on Starknet. Later that month, StarkWare demonstrated a Private Know Your Customer system that allows users to verify personal information without sharing full identity documents.
What is confirmed
- Starknet has launched the Shadow Accounts feature for wallet privacy in DeFi.
- The feature obscures the link between a user's main wallet and their DeFi activity.
- Shadow account balances and transactions remain publicly visible onchain.
- StarkWare plans to expand the feature to additional DeFi use cases beyond vaults.
Why this matters for crypto users
Public blockchains record every transaction openly, which means anyone can trace a user's DeFi activity back to their main wallet. Shadow Accounts give users a way to keep their financial behavior on DeFi apps separate from their primary wallet identity, addressing a growing demand for privacy in decentralized finance.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.