Key Points
- Starknet has announced plans to settle on Bitcoin and Ethereum, aiming to unify the two largest blockchain ecosystems.
- The move is expected to unlock new DeFi opportunities and increase liquidity in the BTC DeFi sector.
Starknet, the ETH L2 scaling solution, has revealed its intention to offer settlement on both Bitcoin (BTC) and Ethereum (ETH).
This will be the first time such a feat has been achieved if it happens within the year.
Starknet’s Vision
Starknet’s goal is to bring together the two largest blockchain ecosystems on a single layer, thereby unlocking new DeFi opportunities and increasing liquidity.
Starknet is one of the most affordable L2s and aims to introduce low-cost transactions to unlock BTC DeFi potential.
It plans to act as BTC’s ‘execution layer’ for DeFi activities such as lending, borrowing, and staking.
BTC DeFi Potential
There are other BTC scaling solutions, including Stacks, Lightning Network, BitVM, and BitcoinOS.
As of early 2025, BTC TVL (total value locked) on its DeFi was about 68K BTC or $5.3B, reaching an all-time high of 73.2K BTC in January 2025.
This growth has bolstered investor confidence in BTC DeFi, which is currently dominated by staking platforms Babylon, Lombard, SolvBTC, and payment provider Lightning Network.
Dan Held, a crypto VC at Asymmetric and BTC DeFi investor, believes the sector has the most untapped potential and could explode to a $300 trillion market size.
Held considers Starknet’s update as significant for BTC DeFi growth.
In a separate interview, Held suggested that BTC DeFi growth could eat into Ethereum and Solana’s market share.
Starknet plans to use federated bridges to bring Bitcoin assets to its platform while awaiting OP_CAT, a soft fork designed to enhance the Bitcoin network’s smart contract capacity.
The impact of the DeFi renaissance on BTC’s value on price charts remains to be seen.