StarkWare splits after Starknet revenue collapse 99% amid lower L2 fees
StarkWare says it will split into two independent units and cut jobs after Starknet revenue collapsed by 99%, driven by a broad fall in layer-2 (L2) fees across the tech sector.
Starknet earned as much as ~$6M per month in late 2023, but revenue fell to around $48K by early April 2026. StarkWare points to Ethereum’s EIP-4844 upgrade in March 2024, which reduced fee generation for L2 solutions industry-wide. Even so, Starknet TVL remains above $200M, suggesting activity may be steadier than fees.
CEO Eli Ben-Sasson said the restructure moves away from “infrastructure-only” and toward in-house, revenue-generating products with clearer ownership. A new Applications unit will launch, led by researcher Avihu Levy, who also published “Quantum Safe Bitcoin (QSB)”. The QSB approach uses hash-based proofs for quantum resistance, but the trade-off is high compute—estimated $75–$200 per transaction vs roughly $0.33 typical BTC fees.
For crypto traders, the key near-term signal is Starknet revenue. With Starknet revenue now far below its late-2023 peak, fee outlook risk rises and sentiment could remain pressured for STRK and other L2s that rely on transaction fees, even as TVL holds up.
Bearish
Starknet revenue collapse signals weaker fee generation going forward. Even with TVL holding above $200M, sustained low fees typically reduce ecosystem revenue expectations and can pressure valuations tied to fee activity. For STRK and Starknet-adjacent L2 narratives, the restructuring and job cuts reinforce that cash-flow risk is real. The longer-term product pivot may help, but near-term market focus will likely stay on Starknet revenue and fee outlook rather than on quantum-resilient R&D.