Starknet, a prominent player in the blockchain ecosystem, has recently announced its groundbreaking plans to settle transactions on both Bitcoin (BTC) and Ethereum (ETH). This move is set to revolutionize the DeFi space by bringing together the two largest blockchain ecosystems onto a single layer. According to Starknet’s official statement, this integration will unlock new opportunities for decentralized finance and provide greater liquidity for users.
The ETH Layer 2 scaling solution also highlighted that it is one of the most cost-effective Layer 2 solutions available, offering low-cost transactions that have the potential to catalyze the growth of BTC DeFi. By positioning itself as BTC’s ‘execution layer’ for DeFi activities such as lending, borrowing, and staking, Starknet aims to tap into the massive growth potential of Bitcoin DeFi.
Despite the presence of other BTC scaling solutions like Stacks, Lightning Network, BitVM, and BitcoinOS, the total value locked (TVL) in BTC DeFi has been steadily increasing. As of early 2025, the TVL stood at around 68K BTC or approximately $5.3 billion, with a record high of 73.2K BTC in January 2025. This growth trend indicates a 43% increase in BTC DeFi TVL since December, instilling confidence in investors and users alike.
Notably, BTC DeFi is currently dominated by staking platforms like Babylon, Lombard, SolvBTC, and the Lightning Network payment provider. The recent surge in interest in BTC DeFi has the potential to further expand the TVL and drive the sector towards new heights. Crypto VC Dan Held, a prominent BTC DeFi investor, believes that the sector holds immense untapped potential and could grow into a $300 trillion market. He emphasized that unlocking DeFi on Bitcoin could be a game-changer for the crypto industry.
In light of Starknet’s latest update, Held expressed optimism about the future growth and adoption of BTC DeFi, stating that it could surpass Ethereum and Solana in market share. The use of federated bridges to bring Bitcoin assets onto the Starknet platform, coupled with the upcoming OP_CAT soft fork to enhance Bitcoin’s smart contract capabilities, reflects the platform’s commitment to innovation and expansion.
As the DeFi renaissance continues to unfold, it will be interesting to see how these developments impact BTC’s value on price charts. The convergence of Bitcoin and Ethereum on Starknet’s platform signals a new era for decentralized finance, with the potential to reshape the crypto landscape. Stay tuned for more updates on this exciting journey towards a more interconnected and inclusive blockchain ecosystem.