A recent report by the Messari Institute, a global cryptocurrency research firm, points out that Starknet's role is rapidly expanding within the Bitcoin-centric decentralized finance ecosystem, also known as "BTCFi." In particular, Starknet is accelerating the construction of a comprehensive self-custodied economic system that transcends simple staking or bridging platforms, encompassing lending, borrowing, yield strategies, and even real-world spending.
Starknet's total value locked (TVL) has nearly doubled in the past six months, growing from $155 million to nearly $310 million. This is a result of increased staking across Bitcoin, stablecoins, and the native token STRK. Lending protocols like Vesu, in particular, are complementing staking platforms, attracting users looking to generate yield using their BTC holdings as collateral. The Messari Institute states that these platforms offer sustainable yields through incentives of up to 100 million STRK, and advanced DeFi yield models, including borrowing and revolving strategies, are becoming active.
Users are maximizing returns through arbitrage trading that seeks to profit from interest rate differentials and through revolving strategies that utilize collateralized assets. For example, a structure that allows users to deposit BTC to borrow USDC and then re-deposit it to amplify leverage can achieve a high annualized return. On Starknet, various strategies that transform BTC from a simple holding asset into a revenue-generating asset are possible, and these functionalities are implemented within an on-chain structure that performs a role similar to that of a traditional financial system.
In particular, products such as mRe7BTC, an option strategy based on encapsulated BTC launched by Re7 Capital, have recently garnered significant attention. This strategy offers a yield of approximately 20%, exceeding the yield levels of existing BTCFi products. The same report indicates that such high-yield products are attracting more sophisticated investors and further enhancing the utility and economic utilization of BTC assets.
Meanwhile, Starknet continues to make technological progress. The introduction of the new S-TWO proof engine based on STARK proofs improves processing speed and sets an eye on future verification integration with the Bitcoin chain. Based on this, Starknet opens up the possibility of using Bitcoin, in addition to Ethereum, as the verification axis for its Layer2 scaling solution. This is interpreted as a strategy aimed at simultaneously enhancing Starknet's cross-chain compatibility and decentralized security.
Along with these technological advancements, services that enhance the actual user experience are also rapidly expanding. For example, the Starknet-based wallet "Ready" is currently transforming into a digital bank, expanding into user-centric financial services. Ready allows users to deposit assets and make purchases without going through centralized exchanges via fiat currency deposit channels, virtual IBAN integration, and the launch of self-custodied debit cards. STRK rewards earned through BTC staking can now be used directly through the Ready card for actual coffee or living expenses. This is seen as a real-world example of decentralized finance (DeFi) systems connecting to real-life applications.
These comprehensive changes indicate that the system is moving beyond a DeFi system solely focused on capital inflows, shifting towards a focus on behavior-based practical utility. The Messari Institute, in its report, commented that Starknet is likely to be positioned as "the first comprehensive Layer 2 platform in the BTCFi ecosystem to provide a complete closed loop from staking, borrowing, yield realization to fiat currency disbursement."
Ultimately, Starknet is redefining Bitcoin from digital gold as an asset that creates economic value, which is expected to have a significant impact on the entire BTCFi market in the future.
