Starknet on Bitcoin and Ethereum

Starknet is working to become the first Layer 2 network to unify Bitcoin and Ethereum, offering scalable interoperability without compromising decentralization or self-custody. The initiative was highlighted during a recent STARK Spaces event featuring Vitalik Buterin and Eli Ben-Sasson. Key innovations include support for privacy-enhancing payments and the introduction of Bitcoin-native assets called Asset Runes, which maintain a 1:1 exposure to Ethereum tokens.

Key Ideas

Cross-Chain Scalability: Starknet intends to unlock new use cases—such as DeFi lending and privacy-preserving transactions—by enabling secure, scalable interaction between Bitcoin and Ethereum.
Bitcoin-Native Assets on Layer 2: Asset Runes offer a trust-minimized way to wrap Ethereum tokens on Bitcoin, creating programmable financial instruments backed by zero-knowledge proofs.

Designing business models that utilize Bitcoin as collateral within Ethereum-based DeFi protocols opens new opportunities for user acquisition and liquidity flow. Platforms offering privacy-enhanced payments and hybrid asset strategies can differentiate through reduced fees, faster settlement, and decentralized custody.