Starknet TVL drops 73% in a day as its biggest app moves to Circle’s Arc

DefiLlama put Starknet’s DeFi TVL at $42.1 million on October 23, and Extended’s share of that fell 98% to $2.3 million. That is the whole story in one number. The chain’s flagship perp DEX packed up and left, and the TVL went with it.

The migration ran at 13:00 UTC on October 22. About $120 million in TVL moved to Arc, and trading never stopped. Arc confirmed it from its own account: Extended is fully migrated and live, with USDC as collateral and cirBTC as the Bitcoin collateral. You can see the announcement on X and the original notice from Extended that started the countdown.

Why Extended left

Extended said back on September 18 that the move was part of a strategic partnership with Circle. Its October 8 post promised sub-second finality and stablecoin-denominated fees that keep costs predictable. Arc also launched with BlackRock, DTCC, ICE, Visa and Mastercard among its founding validators. For an exchange that wants institutional distribution, that is a hard pitch to ignore.

The switch was not free for users. USDT and wBTC do not exist on Arc, so anyone holding more than $1 of either had to convert or withdraw before the October 21 deadline.

Perps volume left too

Extended is the only protocol listed on DefiLlama’s Starknet perps page. So when it moved, the chain’s perps activity moved with it. Starknet has one less reason to show up on a volume leaderboard.

Is Starknet shutting down?

Shutdown chatter started on X within hours. I don’t see support for it. Coverage over the past day shows no outages, bridge exploits or contract incidents on Starknet. What the chain is actually doing is stranger, and arguably more interesting.

Eli Ben-Sasson floated the idea of Starknet becoming an independent L1 on October 8, the same day Extended announced its move. His original post pitched it as a post-quantum play. Two days later StarkWare wrote that an independent L1 is “our clearest path forward.” You can read that here, and the vote announcement after it.

The poll closed on October 22 with 93.52% of voting power in favor and about 3,200 votes. StarkWare abstained. It is non-binding, a draft whitepaper is due in November, and any real switch needs a separate binding vote. STRK stays the token and the Ethereum bridges stay open.

The turnout number deserves a footnote. One analyst found that Foundation-delegated STRK supplied 94.1% of the voting power he reviewed, spread across 41 addresses. A landslide is less impressive when a few wallets cast most of it.

The market reaction

STRK fell about 9.7% over 24 hours to roughly $0.053, while Bitcoin slid 2.7% to around $81,800 in a broad risk-off move. Part of that is macro. Part of it is a chain losing its busiest app while asking holders to approve a big architectural bet.

None of this is new pressure. StarkWare cut staff in April after Starknet’s chain revenue fell more than 99% from its late 2023 peak. Extended was one of the few things on the network that looked like real demand. Now it is on Arc, and Starknet’s next test is the November whitepaper.