Starknet’s Plan to Settle Transactions on Bitcoin and Ethereum

YEREVAN (CoinChapter.com) — Ethereum layer-2 network Starknet plans to settle transactions on Bitcoin and Ethereum, aiming to connect the two largest blockchains. The Starknet Foundation outlined its March 11 Bitcoin roadmap, stating that it wants the network to become Bitcoin’s execution layer to improve scalability and reduce gas fees.

The plan includes increasing Bitcoin’s transaction speed from 13 transactions per second (TPS) to thousands while lowering block times. The foundation noted that most Bitcoin remains static in wallets and exchanges due to the network’s limited functionality. It highlighted the need to expand Bitcoin’s use 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 foundation stated.

Starknet to Enable Smart Contracts on Bitcoin

The Starknet Foundation believes Bitcoin can be used for more than just a store of value. The plan includes staking, borrowing, lending, leveraged trading, and yield farming on Bitcoin.

A major part of this involves OP_CAT, a Satoshi-era opcode that was disabled due to security concerns. Eli Ben Sasson, CEO of StarkWare, the company behind Starknet, explained that OP_CAT could unlock programmability on Bitcoin, allowing Starknet to settle transactions on the blockchain.

If implemented, developers could build applications on Bitcoin through smart contracts, similar to Ethereum. This would allow Bitcoin DeFi applications to function within the ecosystem.

Starknet to Hold Bitcoin Reserve and Collaborate with Xverse

To support its Bitcoin expansion, Starknet is establishing a Bitcoin reserve, shifting part of its treasury into BTC.

Additionally, the network is working with Xverse, a Bitcoin Web3 wallet, to bring layer-2 solutions to Bitcoin wallets. Ken Liao, founder and CEO of Xverse, confirmed that integration is planned for Q2 2025.

“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.”

Moreover, the integration is expected to give users access to DeFi applications through Bitcoin wallets.

Vitalik Buterin Supports Bitcoin Layer-2 Expansion

During a March 11 X Space, Ethereum co-founder Vitalik Buterin commented on Starknet’s plans. He discussed the importance of trustless asset movement between Ethereum and Bitcoin, which could improve crypto payments and decentralized exchange operations.

“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 scalability challenges of Bitcoin, noting that existing solutions like Lightning Network have limitations. He stated that a Bitcoin layer-2 solution could improve usability.

Above all, the Starknet roadmap aims to provide Bitcoin with Ethereum-like smart contract capabilities, enabling DeFi applications and cross-chain interactions between Bitcoin and Ethereum.