Starknet’s BTC Staking Launch and BTCFi Expansion

In a significant boost to the BTCFi ecosystem, Starknet has launched BTC staking . As the new feature goes live on the Ethereum Layer-2 platform, users are able to participate in transaction validation and earn rewards.

This important announcement signifies a major step forward in the BTCFi expansion on the platform and offers holders a way to utilize their assets. With the Starknet Foundation investing $12 million to advance the BTCFi ecosystem, it's safe to say we are now entering the age of creative financial products.

Starknet Launches BTC Staking

Starknet has announced BTC Staking, which enables clients to earn rewards by staking the cryptocurrency, while maintaining custody of their assets and helping the network reach consensus.

This staking process is the first trustless way to stake BTC on the Layer 2 level. The platform describes it as the “'bitcoin strategy for OGs” which provides rewards to holders, leveraging wrapped versions like WBTC and tBTC. “I believe Satoshi would be proud,” said StarkWare CEO and co-founder Eli Ben-Sasson. She added,

“There's a real beauty to the idea of bitcoin, the coin of the first blockchain, helping to secure another decentralized network that is delivering blockchain ethos and functionality to new areas of life.”

Notably, the solution does not alter Bitcoin's native proof-of-work consensus, instead utilizing wrapped versions. Following an on-chain vote, these wrapped assets can now be delegated on the blockchain, enabling Bitcoin holders to contribute to the network's security and earn rewards. Eli Ben-Sasson noted,

"Last year, I said Starknet would unleash Bitcoin's power. Today we're making good on that promise … bringing value to bitcoin holders with no loss in trust. For me, it's two dreams converging. The ZK-tech that I willed into existence, merging with Satoshi's vision that you own your life now you get real yield, real consensus powered by your own bitcoin."

BTCFi Expansion

The network has also announced a 100 million STRK investment, valued at about $12 million, to accelerate the BTCFi expansion. The initiative will focus on incentivizing borrowing against Bitcoin, positioning the blockchain as the go-to platform for cost-effective BTC collateralization and yield generation. According to Ben-Sasson, “Bitcoin is the best form of collateral.” Thus, the move empowers users to leverage their crypto to unlock new investment opportunities.

In addition, Re7 Capital, a digital asset investment firm, is set to launch a BTC-denominated yield product on Starknet in October. The strategy will generate returns directly in the crypto through a mix of off-chain derivatives trading, curated DeFi yield strategies, and staking. Designed to meet institutional standards, the fund will also be tokenized, making it accessible to a broader range of investors beyond professionals.