Starknet launches Shadow Accounts to mask DeFi wallet activity

The new feature, built on the existing STRK20 privacy framework, functions by generating unique addresses for specific applications. Unlike temporary transaction helpers, these accounts remain consistent, enabling users to manage lending positions, accumulate rewards, or navigate financial services under a separate identity. Each account is derived from a combination of user data, the target application, and a unique identifier known as a nonce.

While the mechanism obscures the connection between a user's primary wallet and their DeFi activity, it does not provide full anonymity for the assets themselves. Because Shadow Accounts hold standard ERC-20 tokens, their balances and transaction histories remain accessible through blockchain explorers. StarkWare notes that once an observer identifies a particular Shadow Account, they can still analyze the operations recorded at that address.

To utilize the feature, users deposit assets into a shared privacy pool, where they are converted into shielded balances. When interacting with a compatible application, the wallet moves these funds to the designated Shadow Account. Developers can integrate this functionality through the Starknet Wallet API—specifically the shadow_account_invoke method—without requiring access to user viewing keys. The tool currently supports Starknet Wallet API version 0.10.4 and starknet.js version 10.8.0 or newer.