Starknet Hit by Another Outage: What This Means for ETH Users

[Ben Graham]

Ethereum Layer-2 network Starknet reportedly suffered fresh mainnet downtime, adding another outage to a growing list of reliability scares in 2025. While Starknet’s token price data stayed limited at press time, the network still secures around $548 million in value, so every hour offline traps real money and freezes real trades.

This comes as Ethereum scaling solutions race to attract users and developers, even as outages remind everyone that faster and cheaper does not always mean safer.

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What Just Happened to Starknet, And Why Should Everyday Users Care?

Starknet is a so‑called Layer‑2 network for Ethereum. Think of it as an express lane built on top of the Ethereum highway that batches many transactions together, then settles the result back to Ethereum for security. It uses a technology called a ZK‑rollup, which relies on advanced cryptography to prove that batched transactions are valid without showing every step on Ethereum itself.

In 2025, that express lane kept stalling. Starknet’s own incident report, earlier outages tied to its Grinta (v0.14.0) upgrade caused sequencer failures and issues with older Cairo0 code. The sequencer is the piece of software that orders transactions on Starknet, similar to a traffic cop deciding who goes first at a busy junction.

When that traffic cop fails, everything backs up. In September 2025, Starknet’s downtime lasted as long as nine hours and even forced two transaction reorganizations that erased roughly an hour of network history.

During a reorg, the chain “rewinds” to a previous state and builds a new version, which can cancel trades and transfers that users thought were final. That means a swap you made or a loan you repaid on Starknet might vanish and need a second try.

STARKNET OUTAGE UPDATE

Starknet has been down for 2+ hours and the network is currently experiencing downtime.

• The team has acknowledged the issue
• Investigation is ongoing
• Restoration efforts are in progress
• Price is holding well so far

Monitoring for updates.… pic.twitter.com/pJAu2uahen

— Wise Advice (@wiseadvicesumit) January 5, 2026

Starknet now ranks among Ethereum’s larger Layer‑2s with about $548 million locked on it. That money sits in DeFi apps, NFT markets, and wallets that all depend on the network staying live.

So when Starknet goes dark, users cannot move funds, close positions, or react to price swings, while markets elsewhere on Ethereum keep moving without them.

If you want a refresher on how Ethereum scaling works more broadly, 99Bitcoins covered it in detail when Ethereum stablecoin transfers hit $8 trillion in volume on the Ethereum Network. That big-picture view helps you see why these layers matter so much.

How Does This Outage Change the Layer‑2 Race on Ethereum?

Starknet competes with other Ethereum Layer‑2s like Arbitrum, Optimism, zkSync, and Coinbase’s Base. Each offers lower fees and faster confirmations than the Ethereum mainnet, but each one is still an independent network with its own risks.

Users choose them like they choose banks or brokers: whoever feels safer and smoother over time wins deposits and volume.

(Source: Starknet Total Value Locked Rise Prior To The Incident / DefiLlama)

Repeated outages chip away at Starknet’s reliability story. While it markets advanced cryptography and strong Ethereum security, users experience something simpler: “Can I send my money when I need to?” Networks like Arbitrum and Optimism have issues of their own, but they did not suffer the same pattern of long downtimes in 2025. That difference shapes where developers launch new apps and where users park funds.

Meanwhile, the ZK‑rollup sector keeps changing. ZKsync Lite will retire in 2026 as teams migrate to newer versions. When base infrastructure changes that fast, outages remind everyone that this tech is still young.

Even if Ethereum’s own upgrades, like the ones we covered in our guide to upcoming Ethereum upgrades, aim to make the main chain more efficient, the Layer‑2s on top still need to prove they can stay online.

Starknet also pushes toward decentralizing its sequencer so that one entity no longer controls transaction ordering. Recent incidents raised doubts about whether the network can safely make that jump. A rushed or buggy decentralization could spread instability instead of reducing it, especially while billions in value depend on that infrastructure.

For Ethereum itself, these hiccups cut both ways. On the one hand, they highlight the risks of building on fresh infrastructure. On the other hand, they show the demand for scaling and the pressure on teams to improve quickly, which lines up with the long-term goals Vitalik Buterin set for the network’s growth that we discussed in our piece on Ethereum.

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What Should Starknet And Ethereum Users Actually Do Now?

Before you bridge funds into Starknet, ask three simple questions. One: Do I understand the risk that my money might be temporarily stuck? Two: Do I actually need the lower fees for this trade or yield strategy? Three: Is this money I can afford to leave alone if something breaks for a few hours or even a day?

Traders and DeFi users should also watch incident reports like the one Starknet posted on its blog. If I were an investor, I would watch closely how the team handles this incident over the next few days.

Teams that publish clear timelines, fixes, and follow‑up plans usually handle problems better over time than teams that stay quiet. But transparency does not remove risk. It only helps you judge how seriously a project treats your deposits.

(Source: STRKUSD / TradingView)

For beginners choosing where to start with Ethereum DeFi, a simple rule helps: favor stability first, speed second. Learn how Ethereum mainnet, major Layer‑2s, and DeFi apps work before you stretch for extra yield on less‑tested networks.

Starknet’s next moves, how quickly it stabilizes the sequencer, how openly it reports fixes, and how it handles decentralization, will decide whether users trust it with more of their ETH. As Layer‑2 competition heats up, these reliability stories will matter as much as APY and fees.

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