Key Takeaways:

• Starknet has enabled Bitcoin staking on its Layer-2 network, distributing rewards in its native STRK token.
• The mechanism relies on wrapped Bitcoin assets, ensuring Bitcoin's proof-of-work base layer remains unmodified.
• This innovation fuels an ongoing debate about Bitcoin's potential evolution from a static store of value into a productive source of DeFi capital.

On September 30, Starknet launched a Bitcoin staking service, which it describes as the first trustless implementation on a Layer-2 network. This system allows users to delegate their Bitcoin to participate in network validation and earn rewards.

Does Bitcoin Staking Affect Layer Structure?

​​The first detail of note is that the staking mechanism does not modify Bitcoin's foundational proof-of-work layer, where miners secure the network. Since Bitcoin's native protocol does not support staking, Starknet's solution operates on a separate layer. 

1/ Bitcoin doesn’t change. But what you can do with it just did.

From the June 2024 announcement that Starknet would scale Bitcoin, to the product rollouts of March 2025, the path has been clear.

BTCFi on Starknet is where that momentum now leads 🧵 pic.twitter.com/dznkDJYsK8

— Starknet (BTCFi arc) (@Starknet) September 30, 2025

The system utilizes wrapped Bitcoin tokens—such as WBTC, tBTC, Liquid Bitcoin, and SolvBTC—which represent Bitcoin on other blockchains. 

Following a community vote in August, these assets can now be delegated on Starknet to participate in its consensus mechanism alongside STRK tokens. This process is secured by zk-STARK cryptography, a technology designed to be resistant to quantum attacks and already proven in production environments. Consequently, users can engage in Bitcoin staking that is both scalable and secure.

Eli Ben-Sasson, co-founder and CEO of StarkWare, explained that Starknet was created to expand Bitcoin's functionality without compromising its trustless nature, framing the development as a convergence of Satoshi Nakamoto's vision of self-sovereignty with advanced cryptographic principles.

Bitcoin. Freedom. Starknet.
🧡
Huge news: BTCFi is here pic.twitter.com/XDVLbGKRpt

— Eli Ben-Sasson | Starknet.io (@EliBenSasson) September 30, 2025

The initiative's impact extends beyond the network itself. 

For instance, London-based investment firm RE7 is developing a Bitcoin-denominated yield product on Starknet. This will allow investors to earn returns directly in Bitcoin, a significant development for institutions that measure performance in BTC.

The Starknet Foundation is also investing heavily to grow this ecosystem. It plans to allocate 100 million STRK tokens (about $12 million) to encourage Bitcoin-related activity on the network. 

Part of this funding will go toward incentivizing borrowing against BTC. The goal is to make Starknet the most cost-effective platform for using Bitcoin as collateral while fueling new yield strategies.

Why Long-Term Hodling May Be a Weakness in Bitcoin’s System

The debate around Bitcoin staking also highlights another issue. Some argue that staking itself may not align with Bitcoin’s original model. 

However, Ben-Sasson suggests that a potential limitation for Bitcoin is its prevalence as a dormant asset, frequently held long-term without generating utility.

This “hodling” trend is evident in corporate strategy. On September 22, Japanese firm Metaplanet purchased 5,419 BTC (worth approximately $632.5 million), increasing its treasury to 25,555 BTC. Similarly, China's Next Technology Holding, already the country's largest corporate Bitcoin holder, announced plans to raise $500 million to acquire more BTC.

While such accumulation reinforces Bitcoin's scarcity and value, it simultaneously restricts its application within decentralized finance. Starknet's staking service offers a counterpoint to this model.
Bitcoin staking on Starknet may start to change this imbalance. By allowing holders to delegate wrapped Bitcoin, the network creates ways to earn rewards, secure consensus, and use BTC as collateral.