Ethereum L2 Starknet Aims for Bitcoin's 'DeFi Takeoff Moment' with BTC Xverse Wallet
Ethereum L2 Starknet Aims to Achieve Bitcoin's 'DeFi Takeoff Moment' Through Integration with BTC Wallet Xverse
The main goal is to offer a Bitcoin DeFi experience by applying trust assumptions as the next step after zero-knowledge proofs until OP_CAT is implemented.
Jamie Crowley | Edited by Steven Alpher on 11 March 2025, 16:38 UTC
Key facts:
- Ethereum Layer-2 Starknet, together with BTC wallet Xverse, aims to provide a “complete DeFi experience for Bitcoin users.”
- The collaboration with Xverse coincides with increased research into scaling Bitcoin using Starknet.
- Developers are increasingly exploring how to use BTC's security and vast reserves to expand the capabilities of DeFi and the blockchain ecosystem.
One of the key projects working to increase the speed of the Ethereum network is building on the world's first blockchain: Bitcoin.
Ethereum Layer-2 Starknet, in partnership with BTC wallet Xverse, aims to create a “complete DeFi experience for Bitcoin users.”
In an emailed statement Tuesday, Xverse said it will “reach the Bitcoin DeFi takeoff moment” through its integration with Starknet in Q2 2025.
The collaboration with Xverse coincides with a period of increased research into scaling Bitcoin using Starknet.
The Starknet Foundation has unveiled a new Bitcoin roadmap outlining plans for how Starknet will remain fully integrated with Ethereum, “becoming Bitcoin’s execution layer,” with the goal of increasing the network’s scalability “from 13 TPS to thousands.”
Developers are increasingly exploring how to use BTC’s security and large reserves to empower the wider world of DeFi and blockchain. The challenge is how to overcome Bitcoin’s relative lack of programmability compared to Ethereum and other platforms.
Layer 2s like Starknet are designed to solve this problem by acting as an execution layer, processing transactions that are then settled in Bitcoin.
For many observers, the missing piece is OP_CAT: a proposed implementation for the Bitcoin network that could open up new horizons of programmability, which will be critical to enabling DeFi.
Importantly, OP_CAT can enable the use of zero-knowledge proofs, a cryptographic technique that allows statements to be proven to be true without revealing information that could compromise privacy.
OP_CAT has many supporters, but its future as a Bitcoin Improvement Proposal (BIP) remains uncertain. However, Starknet and Xverse are planning to make Bitcoin DeFi a reality even without this proposal.
Xverse's goal is to offer a Bitcoin DeFi experience in its wallet using trust assumptions as the next step after zero-knowledge proofs until OP_CAT is adopted.
“The ultimate goal is definitely trustless DeFi on Bitcoin,” Xverse founder Ken Liao said in a statement Tuesday. “It will still have some trust assumptions ‘training wheels,’ but it’s still exciting to provide the most accurate preview yet of what intuitive DeFi on Bitcoin will look and feel like.”
