Starknet is bringing Bitcoin staking to its Layer 2 network after the community overwhelmingly approved Starknet Improvement Proposal 31 (SNIP-31) on August 21. The move marks a big step toward blending Bitcoin into Starknet’s ecosystem, offering BTC holders both staking rewards and governance rights.
What SNIP-31 Means for Bitcoin and STRK
The proposal lays out a unified staking model where both Bitcoin and Starknet’s native token, STRK, share governance. To keep balance, Bitcoin’s influence is capped at 25% of consensus power, while STRK continues to hold the majority at 75%.
Stakers will earn rewards through additional token issuance, meaning Bitcoin participants gain new incentives without cutting into the existing STRK rewards. Initially, only a select group of wrapped Bitcoin tokens—WBTC, LBTC, tBTC, and SolvBTC—will be supported. Any new wrappers in the future will need community approval and clearance from Starknet’s Monetary Committee before they go live.
Why This Matters for DeFi
This update positions Starknet as a serious player in the emerging “BTCfi” movement bringing Bitcoin into decentralized finance. By allowing Bitcoin holders to stake on the network, Starknet not only grows liquidity but also lets BTC holders earn STRK rewards. Developers emphasize that the design is built to be simple, secure, and insulated from volatility between BTC and STRK, reducing systemic risks.
Upcoming Upgrades to the Network
The approval comes right as Starknet prepares for a major technical update. On September 1, the network will release version 0.14.0, which introduces decentralized sequencing powered by Tendermint, faster pre-confirmations, and a new Ethereum-inspired fee market based on EIP-1559. These improvements aim to lower block times to just 4–6 seconds while boosting censorship resistance.
Alongside staking, Starknet has been expanding its ecosystem with new DeFi platforms, including Extended perpetual trading and even a travel booking integration with Travala showing its ambition to branch into real-world utility.
Market Reaction
Despite the excitement, STRK didn’t escape market volatility. The token fell 6.2% on the day of the announcement, suggesting that investors may be waiting to see how Bitcoin staking plays out in practice before pricing in its full impact.
Still, with community backing and a growing DeFi toolkit, Starknet’s Bitcoin staking push could signal the start of a new chapter in cross-chain participation.
