StarkWare has launched Shadow Accounts on Starknet, a new privacy feature that allows users to trade, lend and manage decentralized finance (DeFi) positions without publicly linking those activities to their main cryptocurrency wallets.
Announced on October 13, the feature creates separate blockchain addresses for individual applications. Built on Starknet’s STRK20 privacy framework, Shadow Accounts allow users to maintain ongoing positions under different identities while keeping the connection to their primary wallets hidden.
The key difference is that Shadow Accounts do not make transactions or balances completely private. Their addresses, holdings and transaction histories remain visible on the blockchain. Instead, the feature is designed to make it harder for outside observers to connect those activities to a user’s main wallet.
Using the same public wallet across multiple DeFi platforms can allow blockchain analysts to track a person’s transactions, holdings and trading strategies. Shadow Accounts aim to reduce that exposure by giving users separate identities for different applications.
Unlike temporary addresses, these accounts can remain active across multiple interactions with the same application. Users can return to existing lending positions, manage investments or collect rewards without publicly connecting those activities to their primary wallets.
According to Starknet’s documentation, users can generate multiple Shadow Accounts for a single application, allowing them to separate different activities within the same service. Each account is derived using information associated with the user, the application and a unique identifier known as a nonce.
However, once an observer identifies a particular Shadow Account, its publicly recorded activity can still be examined. The privacy feature hides the direct connection to the main wallet rather than concealing every transaction.
Shadow Accounts work alongside STRK20, Starknet’s privacy framework for cryptocurrency transfers and shielded balances. The system allows users to deposit supported tokens into a shared privacy pool, where balances are represented through encrypted records.
When a user wants to interact with a compatible DeFi application, the wallet can move the required assets from the shielded balance into the designated Shadow Account. The account can then interact with the application and maintain a position across multiple transactions.
For example, someone using a lending platform could fund a Shadow Account, deposit assets and return later to manage the same position. The application would continue recognizing the account without publicly attaching the user’s primary wallet address to its activity.
When users withdraw funds, supported proceeds can be returned to their shielded STRK20 balances. The wallet handles the required transaction information and generates zero-knowledge proofs, which help validate operations without revealing all the underlying data.
Developers can configure withdrawals to collect an entire token balance, only the amounts received during the latest interaction or a specified amount.
StarkWare has made Shadow Accounts available through the Starknet Wallet API, allowing developers to integrate the feature into existing applications. The company identified the shadow_account_invoke method as the main tool for submitting application calls through a user’s Shadow Account.
The wallet manages proof generation, transaction submission and the information needed to handle shielded balances. Developers do not need access to users’ viewing keys to enable the feature.
The launch announcement identified Starknet Wallet API version 0.10.4 and starknet.js version 10.8.0 or newer as supported integration options. However, users will need compatible wallets and applications to access the functionality.
StarkWare said the system could eventually support a range of services, including liquidity provision, borrowing, staking, recurring purchases, derivatives, prediction markets and NFT marketplaces.
The company did not disclose how many applications had integrated Shadow Accounts at launch, nor did it provide adoption targets or expected transaction volumes.
The release builds on StarkWare’s earlier privacy work. On June 9, the company introduced STRK20, a framework designed to support shielded balances and private transfers for supported ERC-20 tokens on Starknet.
STRK20 uses zero-knowledge proofs to validate transactions while limiting the financial information revealed publicly. Its shared privacy pool allows users to move supported assets between public and shielded states, while viewing keys can provide controlled access to private transaction records.
On June 23, StarkWare also demonstrated a private Know Your Customer system designed to let users verify selected personal information without sharing complete copies of identity documents. The system uses zero-knowledge proofs to confirm details such as age or eligibility while limiting the disclosure of other personal data.
StarkWare’s privacy framework also has limits. Deposits, withdrawals, transaction timing and activity on external applications may remain visible, depending on how a wallet or service is integrated. The company says encrypted viewing keys can allow designated auditors to inspect private transfer records without gaining control of users’ assets.
With Shadow Accounts, StarkWare is extending its privacy tools beyond individual transfers to ongoing DeFi activity. The feature gives users a way to separate their identities across applications while retaining access to persistent positions, although the transactions and balances within each Shadow Account remain publicly visible.
