BTC broke through $93,900, hitting a new all-time high, while the price of Ethereum (ETH) remains steadily around $3,100. The reason behind this lies in the fact that, compared with high TPS (transactions per second) blockchains such as Solana, Ethereum (ETH) has always been constrained by two core issues: low TPS and high Money Laundering. These problems not only limit the scalability of applications on the Ethereum network but also make Layer 2 solutions particularly important in its ecosystem.

In this context, StarkNet, as a pioneer in the Layer 2 extension of Ethereum, has quickly emerged with its low cost and high performance technical advantages. Whether it's the continuous increase in on-chain activities, the rapid expansion of the ecosystem, or the strong community support, StarkNet has demonstrated the potential to lead the Layer 2 track. And its native Token STRK, due to its core position in the ecosystem development, is gradually becoming the focus of the market and investors' follow.

Rapid Increase in On-chain Activities: The Strong Vitality of the Ecosystem

The on-chain data clearly shows that the StarkNet ecosystem is expanding rapidly:

volume significantly rise: According to TokenTerminal data, StarkNet processed nearly 800,000 transactions between November 11th and 18th, a rise of 45% from the previous week, while a month ago it was only 365,000 transactions.

Revenue and user surge: on-chain fee revenue has risen from $7,300 a month ago to $48,000; daily active users have risen 42% to 8,000.

Inflow of funds is rising: bridge deposits have increased by 25%, reaching a total value of 800 million US dollars.

This rise is not accidental. The upcoming launch of the STRK stake mechanism is one of the important factors that enhance the ecological attractiveness. STRK Token stake will be officially launched on November 26th. This feature allows STRK Token holders to stake their tokens to protect the network and receive rewards, aligning incentives and encouraging long-term commitment to the ecosystem.

Starknet's new roadmap was released on November 8, with the main highlights including:

2 Second Block Time: By April 2024, StarkNet plans to reduce the block time from the current 30 seconds to just 2 seconds. This improvement will significantly increase transaction speed and make the network more competitive among other Layer 2 solutions.

Enhanced developer tools: The roadmap includes upgrades to the Cairo programming language and other developer-centric tools, aimed at attracting more projects and developers into the ecosystem.

Technological innovation: the combination of low cost and high performance

Blob gas on Starknet is expected to go live on Mainnet this week.

StarkNet's recent technical updates demonstrate its unique competitiveness in the Layer 2 space. Take the latest release of v0.13.3 as an example, it has reduced Blob gas fees by five times by introducing state delta compression and transaction compression mechanisms. This update not only makes transaction processing on StarkNet more efficient, but also significantly reduces the cost of on-chain operations for users, making it one of the most attractive solutions in the market.

In addition, the StarkNet development team expects to achieve a milestone breakthrough in the next three months by optimizing its native Smart Contract language, Cairo, to increase the transaction processing capacity (TPS) from the current 200 to 1000. This milestone breakthrough will enable StarkNet to directly compete with Solana, whose current TPS ranges from 800 to 1050. This not only means that StarkNet enters the top ranks in performance, but also further solidifies its position as a leading solution for Layer 2 on Ethereum.

Meanwhile, StarkWare CEO Eli Ben Sasson revealed that a further five-fold drop in fees is also being planned, which will significantly alleviate the Gas fee pressure caused by the surge in blockchain activity. This forward-looking layout for future market demand fully reflects the strategic Depth of the StarkNet team.

Community recognition: support from Vitalik

The technological progress of StarkNet has also been highly recognized by Vitalik Buterin, co-founder of Ethereum. He publicly stated on X that StarkNet's performance in improving Ethereum's scalability and dropping data processing costs is impressive. In his view, StarkNet's innovation not only meets the needs of Ethereum Layer 1 for Blob storage, but also sets a new benchmark for Layer 2 solutions through efficient data compression and cost optimization.

In his recent keynote speech at Devcon 2024 in Thailand, Vitalik mentioned that Decentralization, scalability, and inclusivity are key to the development of the Ethereum ecosystem, and StarkNet, as a representative of Layer 2, will play a crucial role in achieving this goal. This support from industry leaders undoubtedly further enhances the market position of STRK.

Differential competition with Solana and other Layer 2

In terms of daily net inflows, StarkNet ranks fourth

StarkWare CEO Eli Ben Sasson said he expects the company's ETHereum layer 2 Starknet's transaction speed to increase fourfold in the next three months, while fees will decrease by "5 times," competing with Solana.

Ben Sasson told Cointelegraph at DevCon 2024 in Bangkok last week that network improvements will come primarily from "better compilation and faster execution" from Cairo, Starknet's native Smart Contract language.

Solana Compass data shows that Starknet will break the milestone of 1,000 transactions per second (TPS) and compete with Solana, which typically handles between 800 and 1,050 non-voting TPS.

Ben Sasson asserts that Starknet's TPS will exceed 1000 or more within the "three months" in the future.

StarkNet is not the only Layer 2 scaling solution, but its performance has gradually pulled away from other competitors.

Compared with Optimistic Rollup architectures such as Optimism (OP) and Arbitrum (ARB), StarkNet provides higher security and scalability based on ZK-Rollup technology.

In addition, compared to Scroll (SCR), zkSync (ZK), the ecosystem of StarkNet rises faster.

TVLrise speed has been higher than Scroll and zkSync in the past month.

In the past month, the DEX trading volume has risen faster than Scroll and zkSync.

Income and expense rise speed is also better than both.

User and fund inflow indicators are better than competitors.

It is worth noting that StarkNet is exploring the potential of a multi-chain ecosystem. Its plan is to introduce the OP_CAT improvement proposal to the BTC network in the next 12 months, making StarkNet the first Layer 2 solution to achieve native Settlement between Ethereum and BTC. This strategic layout will further expand its market advantage and technological leadership.

Token Economy and Fair Valuation of STRK

Currently, STRKToken has unlocked 12.32% of the total supply, with 33.18% locked. The next Token unlock will take place on December 15, 2024, releasing 0.64% of the total supply. Currently, the circulating market capitalization of STRK is $1 billion, and the fully diluted valuation (FDV) is $4.843 billion. From the perspective of unlock ratio and market performance, its current valuation is at a reasonable level, reflecting the market's recognition of its rise potential and ecological value.

Why can STRK come out on top?

Based on the above analysis, the reason why STRK has the potential to win first is:

Technological Leadership: The unique ZK-Rollup architecture and continuous technological optimization make it significantly ahead in scalability and efficiency.

Market demand meets: extremely low Money Laundering and TPS improvement, directly meeting users' demand for low-cost and high-efficiency Layer 2.

Ecosystem support: active users rise, bridge capital inflows, and stake mechanisms further consolidate its position in the market.

Clear future strategy: actively exploring Cross-Chain Interaction development and BTC ecosystem expansion, opening up broader market space for it.

Conclusion: Leader of the new era of Layer 2

In the competition between Ethereum and Solana, the biggest challenge Ethereum faces is still low TPS and high transaction fees, which limits the further expansion of its ecosystem. To break through this bottleneck, Ethereum not only needs the explosion of on-chain applications, but also strong support from Layer 2 solutions. StarkNet is a leader in this field, and with its excellent technological innovation and continuous ecosystem expansion, it has become a key force in breaking the deadlock of the Ethereum ecosystem. If Solana is a fast horse, then StarkNet is the dark horse rising in the Ethereum ecosystem. In the future Layer 2 race, StarkNet may become the decisive force for Ethereum to break through and reshape the competition landscape. And this may be the tomorrow that investors and the Ethereum community are looking forward to.