Ethereum Starknet to pioneer Bitcoin L2 integration for DeFi unification
A new era for blockchain interoperability
Ethereum Layer-2 (L2) scaling solution Starknet is making strides to unify the two most significant blockchain ecosystems — Bitcoin and Ethereum.
The project’s ambitious plans to integrate Bitcoin’s DeFi (Decentralized Finance) capabilities are set to make Starknet the first L2 to facilitate settlements on both Ethereum and Bitcoin. As part of the initiative, Starknet aims to address the limitations of the Bitcoin network, unlocking the potential for Bitcoin liquidity to flow into decentralized finance (DeFi).
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Breaking barriers for Bitcoin DeFi adoption
Bitcoin, the world’s most valuable cryptocurrency, has long faced challenges in supporting DeFi due to high transaction costs, lack of general-purpose computation, and network limitations. Starknet believes that by launching a Bitcoin L2, it can overcome these barriers. The Ethereum-based network will use Zero-Knowledge (ZK) technology and STARK proofs to improve Bitcoin’s scalability, significantly lowering transaction costs and expanding its use in DeFi applications.
The launch of this Bitcoin L2 will make Bitcoin more functional for decentralized applications and will pave the way for several Bitcoin-native DeFi platforms to operate on Starknet. Starknet's development is a move towards bridging the gap between Bitcoin and Ethereum, offering better interoperability and access to Bitcoin as collateral within Ethereum’s DeFi ecosystem.
Integration with Xverse Wallet and future expansion
To bring this vision to life, Starknet is working towards integrating its technology with Xverse Wallet, a leading Bitcoin Web3 wallet, by Q2 2025. CEO Eli Ben-Sasson believes this integration is the first step in Starknet’s mission to become the execution layer for Bitcoin. Starknet’s expansion to Bitcoin is set to revolutionize scalability in blockchain technology, with further plans to build federated bridges for seamless interaction between the two networks.
As Starknet pushes forward, its goal of enhancing Bitcoin’s scalability, DeFi presence, and cross-chain interoperability could lead to a significant transformation in both ecosystems.
