Starknet plans to unify Bitcoin and Ethereum on a single layer 2 network

Key Takeaways

• Starknet aims to connect Bitcoin and Ethereum networks to expand DeFi opportunities.
• The protocol seeks to dramatically reduce transaction fees and increase processing speeds.

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Starknet announced today its plan to become the first layer 2 network that settles transactions on both Bitcoin and Ethereum. The firm aims to unify the two dominant blockchain ecosystems and expand its DeFi capabilities.

The plan targets addressing Bitcoin’s limitations. The flagship crypto asset’s utility beyond holding and trading remains limited, largely due to network limitations, high transaction costs, and reliance on custodial solutions for DeFi activities.

Starknet seeks to transform Bitcoin into a productive asset capable of generating yield and engaging in DeFi activities without compromising its core values of security and decentralization.

To ensure the smoothest Bitcoin integration, Starknet is focusing on building federated bridges, BitVM-powered Bridge, and a future trustless bridge. The firm said it is working with both current and future technologies to build the best Bitcoin bridging solution.

In addition, Starknet shared that it has already partnered with leading Bitcoin projects to build innovative products, including Xverse, Bitcoin staking and other DeFi solutions.

Key improvements

As noted, the platform aims to reduce transaction fees from $2 to $0.002 and decrease block confirmation times from 10 minutes to 2 seconds.

Regarding transaction throughput, Starknet promises to dramatically increase transaction throughput from seven transactions per second (TPS) to thousands.

The firm also targets enhancing user experience with a seamless web2-like user interface with features such as 2FA/3FA-powered wallets and session keys.

Starknet expects to achieve full decentralization by early 2026, eliminating central authority control over transactions.

StarkWare’s Bitcoin and Ethereum reserves

Starknet also revealed that StarkWare, its core contributor, is establishing strategic Bitcoin and Ethereum reserves and will continue accumulating both digital assets over time.

To accelerate Bitcoin integration, the Starknet Foundation is introducing a targeted incentive program. This initiative aims to establish Starknet as a premier destination for BTC holders seeking yield generation, offering a compelling alternative to traditional, centralized platforms.

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