Among the many projects extending Bitcoin functionality, Starknet is leading the way using zero-knowledge (ZK) proofs and Layer-2 (L2) scaling solutions. The Lightning Network BTCPayServer It’s no secret that Bitcoin has a scalability problem. This advancement will open up unprecedented opportunities for decentralized finance (DeFi) and other uses within the Bitcoin ecosystem. Starknet is building powerful alliances and leveraging transformative technology such as BitSNARK. With a deep-rooted belief in decentralization, it seeks to be Bitcoin’s execution layer. The initiative includes a $1 million research fund focused on advancing the potential of Bitcoin forks. Furthermore, it intends to introduce Bitcoin staking on Starknet in Q3.
Starknet's Vision for Bitcoin Scaling
Starknet, which started as an Ethereum L2, has pivoted as of late to building its scaling technology out to Bitcoin. The main goal here is to allow for greater, more dynamic smart contract capabilities on the Bitcoin network. This means utilizing ZK-proofs to confirm massive amounts of complex computations and transactions off-chain, relieving the stress on the Bitcoin main blockchain.
In March, the project celebrated a major milestone. The dynamic multi language team managed to prove the first Stark proof on-chain using the op code on Bitcoin’s Signet test network. While this demonstration wasn’t a direct use case, it did highlight Starknet’s technology potential in helping to scale Bitcoin transactions. Starknet’s mainnet is expected later this quarter.
Starknet is deeply committed to research and academic work to continuously improve its methodology. The recent launch of a $1 million research fund shows their commitment. They’re currently looking to investigate both the opportunity and the challenge in creating their own Bitcoin fork. This research will help shape the most effective solutions. This will give it the confidence that these solutions are technically sound and in alignment with the Bitcoin community’s values.
Technological Innovations: BitSNARK and Programmable Token Framework
At the heart of Starknet’s strategy is the creation and rollout of cutting-edge technological solutions. Another key innovation, BitSNARK, enables trustless lending and other financial agreements to be made without the use of third-party custodians. This technology underpins the BitcoinOS (BOS) Grail bridge, which has already seen significant interest with over 185,000 users testing it on the testnet.
"Our slogan is you’re early to Bitcoin again," - Guy
The Programmable Token Framework is the second major pillar of Starknet’s vision. This framework will provide us with the ability to create tokens with embedded smart contract logic natively on Bitcoin. These tokens might be debt obligations in a traditional fashion, or DeFi cash flow sequences, or other financial instruments with algorithmic distribution suites.
"BOS enables tokens inscribed with zk proofs that embed smart contract logic directly on Bitcoin. These tokens could represent DeFi cash flow sequences or tokens with automatic SAT distribution across order books." - source
Guiding the future of the protocol is Starknet’s technical co-founder Eli Ben-Sasson, a respected cryptographer who co-invented zk-proofs. Having served as the founding scientist of Zcash, his experience in ZK-proofs is an incredible asset to developing and implementing these technologies.
Partnerships and the "Integrity Web"
Starknet is developing collaborations to further build its ecosystem and interoperate with other blockchain networks. One of the most promising integrations is with Bitlayer, to integrate its trust-minimized BitVM bridge into Starknet. In addition, this partnership will help ensure the easy transfer of assets and data between Bitcoin and other networks.
Starknet imagines building an “integrity web,” that links public, decentralized protocols, open source services, and transparent governance. Such a transparency web would hold these integrity values not as assumed, but publicly expressed and displayed. This fits with the larger imperative of building trust and transparency in the blockchain ecosystem.
"Our mission is to bring about a world in which integrity is never assumed but demonstrated publicly and upheld by all," - source
The underlying BitSNARK verification technology pioneered with Zcash has already been used to send funds between chains, proving its effectiveness for cross-chain interoperability. Starknet is striving to be the first L2 solution settling on Bitcoin and Ethereum. This integration will deepen its status as a key connector between these two powerful blockchain ecosystems.
