Starkware Cuts Jobs as Starknet Revenue Collapses
Key Takeaways: A key factor has been Ethereum’s EIP-4844 upgrade, introduced in March 2024, which significantly reduced transaction costs on Layer 2 networks. While the change improved efficiency for users, it also compressed fee revenue across the sector, affecting Starknet and its competitors alike. Despite the revenue drop, Starknet continues to hold nearly $242 million in total value locked, suggesting that user activity has not disappeared but is generating less income. Ben-Sasson said the company now needs to convert its technical strengths into meaningful usage and revenue. He indicated a shift toward building proprietary applications, rather than relying solely on infrastructure that depends on external ecosystems. As part of the restructuring, Starkware will establish a new applications unit focused on developing high-impact products. The division will be led by researcher Avihu Levy, who was recently promoted. Levy’s work includes a proposal known as Quantum Safe Bitcoin, which aims to protect bitcoin transactions from potential quantum computing threats. The approach relies on hash-based proofs instead of traditional signatures, though it carries higher computational demands and significantly higher transaction costs. While the company has not confirmed whether this technology will form part of its commercial strategy, Ben-Sasson said future products would focus on areas where Starkware can offer unique capabilities with minimal reliance on external blockchains or partners. The restructuring comes at a time when many blockchain firms are reassessing their business models. A prolonged market downturn and declining transaction fees have exposed the limits of relying solely on infrastructure revenue. Ben-Sasson, who has worked in the field for over a decade, described the current environment as a period of weak leadership across the industry, adding to the challenges facing companies. Further details on the company’s new direction are expected in the coming weeks. The shift highlights a broader transition in the crypto sector, where firms are increasingly under pressure to move beyond technical innovation and demonstrate clear paths to profitability.Stakeware to Launch New Applications Unit
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