Starknet Unveils Bitcoin-Based Token to Bring Privacy and DeFi Power to Ethereum Layer-2

Layer-2 network Starknet is preparing to launch strkBTC, a Bitcoin-backed token designed to enable private balances and confidential transfers inside Starknet DeFi.

StarkWare (the parent company) and the Starknet Foundation said strkBTC is minted automatically when users deposit BTC, using a deterministic process tied to verifiable deposits. Accordingly, this removes discretionary control over issuance. 

Privacy is built into the protocol, not handled by custodians, wallets, or third-party apps.

Overall, the aim is to let Bitcoin move through DeFi while hiding transfer amounts and counterparties from public view, without breaking composability with other applications. Starknet clarified that users can choose whether to shield balances, and the system is designed to keep auditability and risk tooling workable.

Read more: Anchored in the Past: Why Investors Are Missing Crypto’s Biggest Opportunity

strkBTC Eligible for Bitcoin Staking

strkBTC will also be eligible for Bitcoin staking on Starknet, allowing users to earn yield while keeping balances private if they opt in.

The project fits Starknet’s broader effort to make BTC more “productive” on its network. Starknet has already rolled out Bitcoin staking and yield products, plus incentives to bring BTC into lending, collateral, and other DeFi uses.

Starknet executives said protocol-level privacy could help bring in larger and institutional users who avoid public chains because positions, counterparties, and trading strategies are exposed by default.

The launch builds on Starknet’s earlier bitcoin initiatives, including staking and yield products that let users earn rewards while maintaining custody, along with incentive programs aimed at activating idle BTC for lending, collateral, and other DeFi use cases.

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