StarkWare has launched a Strategic Bitcoin Reserve, pledging to increase its treasury’s allocation in BTC as part of its initiative to weave the leading cryptocurrency into its Starknet Layer 2 network.
Although the specific amount of its Bitcoin holdings has not been revealed, CEO Eli Ben-Sasson indicated that the company aims to set a precedent, believing that all blockchain companies will eventually allocate Bitcoin within their portfolios.
Currently valued at $8 billion, the firm has recently intensified its focus on Bitcoin research and development.
This development positions StarkWare among other crypto entities that have embraced Bitcoin as a treasury asset, following the announcement of a US Strategic Bitcoin Reserve initiated by the previous administration.
Incorporating Bitcoin
As part of its comprehensive Bitcoin strategy, StarkWare is incorporating Xverse, a Bitcoin wallet that accommodates Ordinals and Runes, into Starknet. This integration will enable the use of Bitcoin assets within the Layer 2 network for the first time.
The company is also launching BTCFi Season, an initiative from the Starknet Foundation aimed at introducing Bitcoin holders to decentralized finance (DeFi) applications like lending and yield farming.
Furthermore, the Braavos wallet has been updated to support Lightning Network payments, facilitating quicker and more economical Bitcoin transactions within Starknet.
These enhancements align with StarkWare’s vision of establishing Starknet as a vital execution layer for Bitcoin, tackling its scalability issues. The company asserts that while Bitcoin is often regarded as digital gold, its widespread adoption has been hampered by slow transaction speeds and elevated fees.
Connecting Bitcoin and Ethereum
StarkWare is also promoting OP_CAT, a proposed soft fork for Bitcoin that could facilitate trustless bridges between Bitcoin and Starknet through advanced scripting and programmable transactions.
This proposal, which was part of Bitcoin’s original design, remains controversial within the community, particularly regarding security implications.
In the meantime, StarkWare is investigating alternative bridging methods, including a federated multisig approach that requires a group of co-signers to secure Bitcoin, and a BitVM-based solution that reduces trust through cryptographic dispute resolution.
The company views these innovations as part of its broader ambition to transform Bitcoin from merely a store of value into a platform for new financial applications, while ensuring security and decentralization.
With further Bitcoin integrations, partnerships, and incentives anticipated in the upcoming months, StarkWare intends to establish Starknet as a connector between Bitcoin and Ethereum, fostering enhanced liquidity and user engagement across both ecosystems.
Referenced in this article
