• Starknet is working on integrating with Bitcoin and Ethereum to enhance scalability, potentially increasing Bitcoin’s transaction speed to thousands per second.
  • The initiative, supported by Ethereum co-founder Vitalik Buterin, could unlock new applications like staking, lending, and decentralized trading on Bitcoin.

Ethereum layer-2 network Starknet is preparing to integrate with both Bitcoin and Ethereum, aiming to unify the two largest blockchains on a single execution layer.

The Starknet Foundation outlined this initiative in its March 11 Bitcoin roadmap, proposing to enhance Bitcoin’s scalability by increasing its transaction speed from 13 transactions per second to thousands while reducing gas fees and block sizes.

According to the foundation, a major portion of Bitcoin remains idle in wallets and exchanges due to the network’s original design limitations, which restrict its scalability and ability to support applications beyond basic transactions.

“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 initiative follows past discussions by StarkWare CEO Eli Ben Sasson, whose company developed the STARK proof system that contributes to Starknet’s development. Ben Sasson previously noted that OP_CAT, an early opcode from Bitcoin’s original design that was disabled over security concerns, could be reintroduced to unlock programmability on Bitcoin and allow Starknet to settle transactions on its blockchain.

If implemented successfully, Starknet’s integration could enable developers to build decentralized applications on the Bitcoin network, supporting functionalities such as staking, lending, borrowing, leveraged trading, and yield farming.

In addition to its technical roadmap, StarkWare announced that it has started allocating a portion of its treasury to Bitcoin reserves.

As part of this expansion, Starknet is collaborating with Bitcoin Web3 wallet Xverse, which plans to integrate with Starknet by the second quarter of 2025.

Xverse founder and CEO Ken Liao emphasized the importance of expanding Bitcoin’s use beyond storage solutions.

“In today’s environment, there is a temptation for wallet teams to say, ‘yeah, let’s just focus on making it easier for people to use Bitcoin as a store of value,’” Liao said.
“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.”

The potential impact of a Bitcoin layer-2 solution was also discussed in a March 11 online forum, where Ethereum co-founder Vitalik Buterin expressed support for the initiative. He highlighted the importance of secure Bitcoin scaling and the benefits of trustless interoperability between Bitcoin and Ethereum.

“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 also pointed out the limitations of the Lightning Network in addressing scalability challenges.

Buterin added that a robust layer-2 solution on Bitcoin could significantly enhance cryptocurrency payments and improve decentralized exchange mechanisms between Bitcoin and Ethereum.

The developments from Starknet, Xverse, and other firms working toward Bitcoin scaling suggest an increasing push toward making the network more functional beyond its traditional role as a store of value.

Edited by Harshajit Sarmah