Bitcoin has taken a step closer to the world of decentralized finance (DeFi) with Starknet’s launch of a new staking mechanism and yield opportunities. The Layer 2 network announced that bitcoin staking is now live on its platform, marking what it calls the first trustless way for BTC to be staked outside Bitcoin’s base layer.
How It Works
Unlike Ethereum, Bitcoin’s main chain does not support staking since it relies on proof-of-work. To bridge that gap, Starknet enables staking through tokenized versions of bitcoin such as WBTC, tBTC, Liquid Bitcoin, and SolvBTC. These wrapped assets can now participate in Starknet’s consensus mechanism, following an onchain governance vote earlier this year.
The system is powered by zk-STARK cryptography, which offers post-quantum security and has already been deployed in production environments. This ensures that users maintain custody of their assets while contributing to the network’s security and earning rewards.
Eli Ben-Sasson, CEO and co-founder of StarkWare, called the development a major milestone:
“We’re bringing value to bitcoin holders with no loss in trust. For me, it’s two dreams converging — ZK technology merging with Satoshi’s vision.”
He added that allowing bitcoin — the first blockchain currency — to help secure another decentralized network reflects the ethos of the broader crypto movement.
Incentives and Institutional Interest
To accelerate adoption, the Starknet Foundation has committed 100 million STRK tokens (about $12 million) to grow its BTCFi ecosystem. The incentives will support borrowing against bitcoin, yield strategies, and other DeFi applications, positioning Starknet as a cost-efficient hub for BTC collateral.
Institutional players are also entering the picture. Re7 Capital, a digital asset investment firm, announced plans to introduce a BTC-denominated yield product on Starknet this October. The fund aims to deliver returns in bitcoin through a blend of off-chain derivatives trading, curated DeFi strategies, and BTC staking. Though structured to meet institutional standards, it will also be available in tokenized form for broader access.
Re7 founder Evgeny Gokhberg emphasized that the strategy is designed to grow BTC holdings sustainably while also reinforcing Starknet’s network security.
A Broader Vision for Bitcoin
The new initiatives represent the first wave of Starknet’s “BTCFi” roadmap, a pivot that began in mid-2024 when the network outlined plans to move beyond Ethereum and integrate Bitcoin. The long-term goal, according to Starknet, is to become Bitcoin’s execution layer — enabling everyday utility and scalable transactions.
Ben-Sasson summed up the vision:
“Bitcoin gave us freedom, but it hasn’t yet scaled to serve daily life. We need to fix that. Today’s announcements are a step toward making bitcoin useful for everyone, every day.”
