The Ethereum layer 2 solution, Starknet, is establishing a framework to facilitate transactions on both Bitcoin and Ethereum, with the aim of merging the two leading blockchains onto a singular layer.
According to its roadmap released on March 11, Starknet’s objective is to serve as an execution layer for Bitcoin, enhancing its capacity from 13 transactions per second to thousands, while also decreasing block sizes and gas fees to improve user experience.
“Currently, much of Bitcoin remains inactive in wallets and exchanges, hampered by the restrictions of its foundational design, which lacks scalability and cannot support applications beyond basic transactions,” noted the organization.
They also expressed that while many investors consider Bitcoin as “digital gold,” there is an emerging need to leverage Bitcoin for a broader range of use cases.
Image Credit:
Previously, the CEO of StarkWare mentioned that OP_CAT, an opcode from the Satoshi era meant to enable programmability on Bitcoin but was disabled due to security concerns, could allow Starknet to secure its operations on the Bitcoin blockchain.
If this initiative is successful, it would empower developers to construct applications on the Bitcoin network via smart contracts, facilitating functionalities such as staking, borrowing, lending, leveraged trading, and yield farming.
In conjunction with this development, StarkWare has announced its participation in the increasing trend of companies creating a Bitcoin (BTC) reserve, progressively incorporating a larger share of its treasury into cryptocurrency.
Image Credit:
Starknet is also partnering with the Bitcoin Web3 wallet Xverse, whose founder Ken Liao stated that their integration, expected in the second quarter of 2025, will mark Bitcoin’s “DeFi take-off moment.”
Xverse emphasized that wallets should evolve beyond mere storage solutions to grant seamless access to Bitcoin’s growing functionalities. Liao highlighted that the ultimate goal is to achieve trustless DeFi on the Bitcoin network.
Related: Unknown attacker causes challenges during Pectra upgrade on Sepolia
“In today’s climate, wallet developers may feel inclined to focus solely on facilitating Bitcoin as a store of value,” Liao remarked.
“However, Bitcoin’s long-term potential also lies in its utility, which is why layer 2 solutions must connect with users through the wallets they regularly utilize,” he added.
Moreover, during a discussion on March 11 regarding Starknet’s strategy, Ethereum co-founder Vitalik Buterin pointed out that a proper layer 2 solution for Bitcoin, fulfilling essential security requirements, could greatly enhance cryptocurrency payments and expand various use cases.
Starknet on Bitcoin and Ethereum https://t.co/tCyQDHY7Yr
— StarkWare 🐺🐱 (@StarkWareLtd) March 11, 2025
Buterin remarked there is significant value in facilitating the smooth transfer of assets between Bitcoin and Ethereum ecosystems, such as simplifying pathways for decentralized exchanges.
“Historically, Bitcoin was envisioned as a peer-to-peer electronic cash system, but layer 1 is currently insufficiently scalable for that,” Buterin stated.
“We have also observed some limitations within the Lightning Network and similar approaches.”
Magazine: MegaETH launch could save Ethereum… but at what cost?