Assessing Starknet's Reliability Risks in the Context of Repeated Outages

Ethereum's Layer-2 (L2) solutions have emerged as critical infrastructure for scaling blockchain adoption, yet their reliability remains a focal point for investors. Starknet, a zero-knowledge (ZK) rollup, has faced significant scrutiny in 2025 due to repeated outages, raising questions about its long-term viability as an investment. This analysis evaluates Starknet's reliability risks against the broader Ethereum L2 ecosystem, including Arbitrum, Optimism, and zkSync, to assess their comparative strengths and weaknesses in a rapidly evolving market.

Starknet's Outages: Causes and Consequences

Starknet's reliability challenges crystallized in September 2025, when a nine-hour outage disrupted block production and necessitated two chain reorganizations to restore operations. The incident, linked to the Grinta (v0.14.0) upgrade, exposed vulnerabilities in its sequencer architecture and external dependencies, including Ethereum RPC provider failures and a bug in the blockifier component according to the incident report. A second four-hour outage in January 2026 further underscored systemic risks, with transaction processing halts and manual intervention gaps compounding the issue as reported by Yellow.

These outages disrupted decentralized finance (DeFi) applications, froze user funds, and eroded trust in Starknet's ability to maintain uptime. According to a report by , the September incident caused "transaction reorganizations that erased portions of the network's history," highlighting the fragility of sequencer-based models. While Starknet's proving layer mitigated security risks, the operational instability raised concerns about its readiness for mass adoption.

Technical Roadmap and Mitigation Efforts

Starknet's response to these incidents has focused on decentralization and fault tolerance. The Grinta upgrade introduced a decentralized sequencer architecture, transitioning from a single to three sequencers, while post-incident measures include enhanced safety mechanisms for external dependencies and reduced reliance on manual interventions as detailed in the incident report. By 2025, Starknet also integrated S-two, a next-generation prover offering 100x efficiency gains, and achieved Stage 1 Rollup status, signaling progress toward full decentralization according to the 2025 year-in-review.

However, these upgrades have not yet resolved underlying risks. A January 2026 outage revealed persistent gaps in sequencer coordination, with block production halts attributed to "inconsistencies in transaction processing and verification" as reported by Yellow. The network's reliance on Ethereum's infrastructure-such as RPC providers-remains a single point of failure, as noted in a Crypto APIs analysis comparing L2 networks.

Comparative Analysis: Starknet vs. Competitors

In contrast to Starknet's volatility, Arbitrum and Optimism have maintained more consistent uptime. Arbitrum, with over $12 billion in TVL and 1.5 million daily transactions as of early 2025, leverages a multi-round fraud proof system and EVM compatibility to attract developers according to Cryptopolitan. Optimism, while trailing in TVL ($6 billion), emphasizes decentralization and community-driven initiatives like Retroactive Public Goods Funding (RPGF) as noted in the same analysis. Both networks have avoided the prolonged outages that plagued Starknet, bolstering their reputations as stable L2s.

zkSync, another ZK-rollup, faced a security incident in 2025 involving a vulnerability in an airdrop contract but did not experience the same pattern of operational disruptions as reported by Gate. Its Atlas upgrade in 2026 improved scalability, though token price volatility and liquidity fragmentation remain challenges according to Cryptonomist.

Investment Viability: Balancing Risks and Rewards

The broader Ethereum L2 market has shown resilience despite outages. Total TVL across L2s grew from $4 billion in 2023 to $47 billion by October 2025, with Arbitrum and Optimism dominating market share according to Everstake. Starknet's TVL of $548 million, while lower, reflects its niche focus on ZK innovation and high-value transactions as reported by Yahoo Finance.

For investors, the key trade-off lies in risk tolerance. Starknet's technical roadmap-centered on decentralization and proving efficiency-positions it as a long-term contender, but its recent outages highlight operational risks. Arbitrum and Optimism, with more mature ecosystems and established reliability, offer safer bets for capital preservation. Meanwhile, ZK-rollups like zkSync may gain traction in 2026 as proving costs decline and finality speeds improve according to B2Broker.

Market Confidence and Future Outlook

Market confidence in L2s remains strong, driven by institutional adoption and regulatory clarity. A 2026 report by Everstake notes that ZK-rollups are expected to become the default for high-value transactions due to their privacy and finality advantages as reported by Cryptopolitan. However, Starknet's outages have prompted developers to prioritize redundancy and testing, as highlighted in a The Block analysis according to MEXC.

Looking ahead, Starknet's ability to stabilize its sequencer architecture and address external dependencies will be critical. If successful, its focus on ZK innovation could attract niche use cases like gaming and enterprise DeFi. For now, however, investors must weigh Starknet's potential against its track record of disruptions-a cautionary tale for the broader L2 space.

Conclusion

Starknet's repeated outages in 2025 underscore the challenges of balancing innovation with reliability in the Ethereum L2 ecosystem. While its technical roadmap includes promising upgrades, the network's operational risks remain a barrier to mass adoption. Competitors like Arbitrum and Optimism, with their proven uptime and developer ecosystems, currently offer more stable investment opportunities. For Starknet to reclaim its position as a leading L2, it must demonstrate that its decentralized sequencer model can withstand the pressures of real-world usage. Until then, investors should approach with caution, prioritizing projects with established reliability and clear paths to scalability.