In a bold move that could revolutionize blockchain interoperability, Ethereum Layer 2 scaling solution Starknet has unveiled plans to settle on both Bitcoin and Ethereum, aiming to bring the two largest blockchains together under a single execution layer.
The Starknet Foundation, in its March 11 Bitcoin roadmap, outlined an ambitious vision to position Starknet as Bitcoin’s execution layer, enhancing the blockchain’s capabilities beyond its current limitations. The goal is to scale Bitcoin from its current 13 transactions per second to thousands, reducing block times, cutting gas fees, and vastly improving the user experience.
Why Bitcoin Needs an Execution Layer
The Starknet Foundation pointed out that most Bitcoin today remains static in wallets and exchanges, primarily due to the network’s original design constraints. Bitcoin’s lack of scalability and its inability to natively support applications beyond simple transactions have prevented it from evolving into a broader financial ecosystem.
While some investors continue to view Bitcoin as “digital gold,” Starknet believes there is increasing demand for expanding Bitcoin’s utility beyond just a store of value. The ability to enable staking, lending, borrowing, leveraged trading, and yield farming could push Bitcoin into a new era of decentralized finance (DeFi).
The Role of OP_CAT in Unlocking Bitcoin’s Programmability
Previously, Eli Ben Sasson, CEO of StarkWare, the company behind the STARK proof technology that contributes to Starknet’s development, emphasized the importance of OP_CAT—a Satoshi-era opcode that was disabled over security concerns. If successfully reintroduced, OP_CAT would allow Starknet to settle directly on the Bitcoin blockchain, opening the door for native smart contract capabilities on Bitcoin.
If successful, Starknet’s initiative would enable developers to build decentralized applications (dApps) on Bitcoin without relying on intermediaries. This development would significantly expand Bitcoin’s use cases, making it more than just a store of value.
Starknet Teams Up with Bitcoin Web3 Wallet Xverse
As part of its expansion strategy, Starknet is collaborating with Xverse, a leading Bitcoin Web3 wallet, to bring Bitcoin’s DeFi take-off moment closer to reality.
Ken Liao, founder and CEO of Xverse, emphasized that wallets should not merely function as storage solutions but should enable users to fully participate in Bitcoin’s growing utility. According to Liao, the long-term vision is to enable trustless DeFi on Bitcoin, ensuring users can interact seamlessly with dApps and financial protocols without intermediaries.
The integration between Starknet and Xverse is scheduled for Q2 2025 and is expected to significantly improve Bitcoin’s DeFi landscape.
Vitalik Buterin’s Take on a Bitcoin Layer 2
In a March 11 X Space discussion, Ethereum co-founder Vitalik Buterin expressed strong support for a proper Bitcoin Layer 2 solution that maintains the necessary security properties to facilitate trustless transactions.
According to Buterin, such an innovation would “make crypto payments great again” and enable more seamless use cases, including decentralized exchanges and other DeFi applications. He highlighted the need for Bitcoin and Ethereum ecosystems to interconnect more efficiently, allowing assets to flow freely between the two chains.
“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 noted. He also pointed out the limitations of the Lightning Network, suggesting that a more robust execution layer would be required to fully realize Bitcoin’s original vision.
Starknet Establishes a Bitcoin Reserve
As part of its commitment to Bitcoin’s long-term integration, StarkWare announced the creation of a Bitcoin reserve, with a growing portion of its treasury being held in crypto.
This move reflects a broader trend among blockchain firms, where holding Bitcoin as a reserve asset signifies confidence in its long-term value and utility. By doing so, StarkWare is reinforcing its belief that Bitcoin is not just a passive investment but a foundational element of the future decentralized financial system.
A Major Leap Toward Blockchain Unification
With Starknet’s planned integration of Bitcoin and Ethereum, the blockchain industry is witnessing a significant step toward unifying the two largest networks under a single Layer 2 execution layer. This integration could unlock a new wave of innovation, providing users with scalable, low-cost, and efficient transaction capabilities across both ecosystems.
By scaling Bitcoin’s transaction capacity and enabling smart contract functionality, Starknet is paving the way for Bitcoin’s evolution into a fully functional financial system beyond simple transactions. The collaboration with Xverse, support from Vitalik Buterin, and the establishment of a Bitcoin reserve all indicate that this vision is gaining momentum.
If Starknet succeeds in its mission, we could see Bitcoin transition from a static store of value to a thriving DeFi powerhouse, seamlessly integrated with Ethereum’s smart contract ecosystem.
