Starknet Launches Bitcoin Staking And STRK Fund

Layer2 network Starknet has announced several new initiatives, including Bitcoin staking and a 100 million STRK incentive program. Other initiatives include an institutional-grade BTC yield product. 

Staking allows holders to stake their BTC on Starknet without relinquishing custody and earn rewards while contributing to the network’s security. 

Bitcoin Staking Is Live On Starknet 

Starknet has officially launched Bitcoin staking, along with a 100 million STRK fund to boost the BTCFi ecosystem. The project describes its Bitcoin staking initiative as the first trustless way BTC can be staked on a Layer 2 network. The initiative allows holders to earn rewards while maintaining custody of their assets, and helps secure the network. 

The staking mechanism does not alter Bitcoin’s base layer, which utilizes a Proof-of-Work consensus mechanism and does not support staking. Starknet’s staking initiative uses wrapped versions of BTC, including WBTC, tBTC, Liquid Bitcoin, and SolvBTC. These can be delegated on Starknet and can participate in Starknet’s consensus along with the STRK token after an on-chain vote. The tokenized holdings are secured by zk-STARK cryptography, providing post-quantum security. StarkWare CEO and co-founder Eli Ben-Sasson released a statement, stating, 

STRK Initiative 

The Starknet Foundation also announced the allocation of 100 million STRK ($12 million) to support the BTCFi ecosystem on Starknet. This includes incentivizing borrowing against BTC to make Starknet the most cost-effective avenue for using Bitcoin as collateral and powering yield strategies. Ben-Sasson added, 

BTC-Denominated Yield Product 

Digital asset investment firm Re7 Capital has announced plans to launch a BTC-denominated yield product on Starknet in October. The strategy is designed to generate returns directly in BTC through a combination of off-chain derivatives trading, curated DeFi yield strategies, and participation in BTC staking on Starknet. The fund will also be available in a tokenized format, making it accessible beyond professional investors. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.