Starknet Plans to Bridge Bitcoin and Ethereum into a Unified Layer

Ethereum Layer 2 network Starknet is taking bold steps to bridge the gap between Bitcoin and Ethereum, potentially unlocking a new era of decentralized finance (DeFi) on the world’s largest cryptocurrency network. 

The Starknet Foundation revealed in its March 11 Bitcoin roadmap that developers could soon leverage smart contracts to build apps on Bitcoin, enabling advanced features like staking, borrowing, lending, leveraged trading, and yield farming.

The foundation envisions Starknet as Bitcoin’s execution layer, with the potential to scale transactions from the current 13 per second to thousands. This shift would drastically reduce block times and gas fees, ultimately enhancing the user experience and expanding Bitcoin’s functionality beyond simple transactions. 

The foundation noted that, despite Bitcoin’s dominance, much of its supply remains static in wallets or exchanges, constrained by the network’s original design.

“Most Bitcoin today sits static in wallets and exchanges, constrained by the limitations of the network’s original design: a lack of scalability and an inability to natively support applications beyond simple buying, selling, and transferring,” the foundation stated. 

They believe that while many investors view Bitcoin as "digital gold," there is growing demand to use the asset for more dynamic applications. Starknet’s vision could help Bitcoin evolve into a versatile financial ecosystem, bringing it closer to its original vision as a peer-to-peer electronic cash system.

StarkWare CEO Eli Ben Sasson explained that OP_CAT — an opcode from Bitcoin’s early days, disabled due to security concerns — could be revived to enable programmability on Bitcoin. If restored, OP_CAT would allow Starknet to settle on Bitcoin, unlocking smart contract capabilities that have historically been Ethereum’s domain. 

This development would empower developers to create a wide array of financial applications directly on the Bitcoin network without compromising security or decentralization. In turn, Bitcoin could become a more dynamic, scalable, and flexible blockchain, ready to support the next generation of decentralized applications (dApps).

In line with its commitment to Bitcoin’s future, StarkWare has begun holding Bitcoin in its treasury and announced a partnership with Web3 Bitcoin wallet Xverse. The wallet provider plans to support the Starknet integration by the second quarter of 2025, with CEO Ken Liao calling it Bitcoin’s "DeFi take-off moment." 

Liao emphasized that wallets need to do more than store assets — they should act as gateways to Bitcoin’s expanding utility. "In today’s environment, there is a temptation for wallet teams to say, ‘let’s just focus on making it easier for people to use Bitcoin as a store of value.’ But the long-term future of Bitcoin also includes utility, and that’s why Layer 2 solutions must reach the public via the wallets they actually use," he explained.

During a March 11 X (formerly Twitter) space, Ethereum co-founder Vitalik Buterin expressed strong support for Starknet’s vision. He highlighted the importance of a secure Bitcoin Layer 2 that can facilitate the trustless flow of assets between Bitcoin and Ethereum. Buterin believes such a development could revitalize crypto payments and enable seamless decentralized exchanges across the two networks. 

“If you go back to the white paper, Bitcoin was meant to be a peer-to-peer electronic cash system, and obviously, Layer 1 is not nearly scalable enough for that,” Buterin said. He acknowledged the limitations of existing scaling solutions, like the Lightning Network, and suggested that a robust Layer 2 could finally deliver on Bitcoin’s original promise.