Starknet unlocks Bitcoin staking with BTCFi yield push

Starknet unlocks Bitcoin staking with BTCFi yield push

Starknet has officially launched a new feature that opens the door for Bitcoin to enter the staking arena on its network.

According to The Block, users can now stake BTC in wrapped tokens like WBTC, tBTC, or SolvBTC and earn rewards. Starknet is also promoting yield products that offer new ways to utilize the largest asset in the crypto world.

New rules bring Bitcoin into Starknet’s consensus

Some time ago, the Starknet community approved the SNIP-31 proposal with over 93% support. This regulation allows Bitcoin to be used in a staking mechanism alongside the STRK token.

As a result, the consensus weight is now split, with approximately 25% coming from wrapped BTC and the remaining 75% remaining in STRK. With this scheme, Bitcoin’s position clearly plays a role, but it doesn’t replace STRK’s primary role.

Furthermore, there’s an interesting change to the unstaking period. Previously planned for 21 days, it has now been reduced to just 7 days.

This change certainly provides greater flexibility for users who want to withdraw their assets without waiting too long. Just imagine, waiting three weeks might discourage people from participating, while one week is clearly more reasonable.

Some time ago, the Starknet community approved the SNIP-31 proposal with over 93% support. This regulation allows Bitcoin to be used in a staking mechanism alongside the STRK token.

As a result, the consensus weight is now split, with approximately 25% coming from wrapped BTC and the remaining 75% remaining in STRK. With this scheme, Bitcoin’s position clearly plays a role, but it doesn’t replace STRK’s primary role.

Furthermore, there’s an interesting change to the unstaking period. Previously planned for 21 days, it has now been reduced to just 7 days.

This change certainly provides greater flexibility for users who want to withdraw their assets without waiting too long. Just imagine, waiting three weeks might discourage people from participating, while one week is clearly more reasonable.

Incentives and yield innovation meet bridge security concerns

To accelerate the growth of the BTCFi ecosystem, the Starknet Foundation has allocated 100 million STRK, worth approximately $12 million.

These funds are used to incentivize activities involving BTC, ranging from BTC-collateralized loans and yield strategies to the use of BTC as collateral in various protocols.

Furthermore, investment firm Re7 Capital is also developing a BTC-based yield product on Starknet. This product combines off-chain derivatives, DeFi strategies, and BTC staking, which will eventually be accessible through tokens, enabling retail investors to participate.

However, several caveats should not be overlooked. The use of wrapped BTC remains dependent on the security of cross-chain bridges. If those bridges are compromised, the risks are naturally borne.

Furthermore, the BTC staking system on Starknet currently does not implement a slashing mechanism or penalty reduction for violating validators. Therefore, despite being considered a relatively safe staking platform, vulnerabilities still need to be monitored.

On the other hand, this expansion demonstrates Starknet’s broader direction. The network aims to become a kind of execution layer for Bitcoin, where this digital asset doesn’t just sit in wallets but can also be productive in the world of decentralized finance.

Up