Starknet Introduces Bitcoin Staking for Consensus

Starknet is set to introduce bitcoin staking to its Ethereum Layer 2 network following a successful community vote in favor of SNIP-31, which garnered 93.6% support. As a Layer 2 scaling solution for Ethereum utilizing zero-knowledge proofs, Starknet employs STRK as its native token. According to the parameters approved by token holders, bitcoin's staking power weight will be established at 0.25, granting BTC a potential influence of up to 25% in the overall consensus mechanism. Meanwhile, STRK will continue to play a central role in securing the network. The official launch is anticipated in the coming weeks. The community initially accepted various BTC wrappers, such as Wrapped Bitcoin, Liquid Bitcoin, tBTC, and SolvBTC. This upgrade will incorporate bitcoin—through these approved tokenized representations—into Starknet's staking framework. The governance rules for evaluating and accepting new BTC wrappers have been established, allowing for future adaptability as the tokenized bitcoin market evolves. Starknet, leveraging its zero-knowledge Layer 2 rollup technology built with STARK proofs, aims to develop a comprehensive “multi-asset” staking model while expanding its developer community and application ecosystem. Recent expansions have focused on app-specific tools via the SN Stack, while also considering additional reserve assets for its economic framework. Incorporating BTC into the staking process aligns with broader industry movements to harness bitcoin liquidity within decentralized finance (DeFi). This shift balances the risks associated with bridges and custodial services linked to wrapped assets. Protocols such as the BTC staking protocol Babylon and BTCfi on Sui enable BTC holders to earn yields, showcasing routes for channeling idle bitcoin into DeFi. Launching with multiple representations could mitigate technical and custodial risks across wrappers. Furthermore, the 25% staking cap aims to maintain STRK’s pivotal role in the network’s stability and governance. Once the feature goes live, holders of the approved BTC wrappers will have the opportunity to delegate or stake their assets on Starknet, alongside STRK, to help secure the network and earn protocol rewards based on the final parameters set at launch.