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Starknet’s Plan to Settle Transactions on Bitcoin and Ethereum
The Starknet Foundation has unveiled a plan to settle transactions on both Bitcoin and Ethereum. This move aims to enable scalability and expand the use of these networks beyond basic transactions.
According to their roadmap, Starknet plans to increase Bitcoin’s transaction speed from 13 transactions per second (TPS) to thousands while reducing block times. The foundation believes that by enabling smart contracts on Bitcoin through OP_CAT, a Satoshi-era opcode previously disabled due to security concerns, they can unlock programmability and allow for the settlement of transactions.
This would enable developers to build applications on Bitcoin, similar to those on Ethereum, and open up possibilities such as staking, borrowing, lending, leveraged trading, and yield farming. This could potentially allow for the creation of DeFi applications within the Bitcoin ecosystem.
To support this expansion, Starknet is setting up a Bitcoin reserve by shifting part of its treasury into BTC. Additionally, they will be working with Xverse, a Bitcoin Web3 wallet, to integrate layer-2 solutions into Bitcoin wallets.
The integration is expected to provide users with access to DeFi applications through their wallets, essentially bringing Ethereum-like capabilities to the world’s most widely held cryptocurrency.
Vitalik Buterin, co-founder of Ethereum, has expressed his support for this plan. He emphasized the importance of trustless asset movement between Ethereum and Bitcoin, which could improve crypto payments and decentralized exchange operations.
Buterin highlighted that while Bitcoin is meant to be a peer-to-peer electronic cash system, its current scalability limitations prevent it from realizing its full potential. He believes that a layer-2 solution can address these issues and make the network more usable.
The Starknet roadmap aims to bring Ethereum-like smart contract capabilities to Bitcoin, enabling DeFi applications and cross-chain interactions between Bitcoin and Ethereum.
