Starknet Activates Bitcoin Staking Through SNIP-31: A New Era for BTCfi on Layer 2

Community Vote Drives Major Protocol Change

Starknet’s community made a bold move on August 21 by endorsing SNIP-31 with overwhelming support—93% of voters backed the proposal. This governance decision marks a pivotal moment for the Layer 2 network, opening the door for Bitcoin holders to participate directly in Starknet’s staking ecosystem. The initiative reflects a broader industry shift toward cross-chain asset integration and DeFi expansion.

How Bitcoin Joins the Staking Game

The newly approved framework establishes a dual-token staking model that reimagines how BTC and STRK can coexist within consensus mechanisms. Rather than treating Bitcoin as a secondary asset, SNIP-31 allocates it meaningful influence—up to 25% of total staking power—while STRK maintains a 75% majority stake. This balance preserves network security while embracing Bitcoin’s liquidity.

The initial phase will support specific Bitcoin wrappers: WBTC, LBTC, tBTC, and SolvBTC. Any additional wrappers seeking integration must pass community approval and receive clearance from the Monetary Committee, ensuring decentralized oversight.

Additional STRK token issuance will fund Bitcoin staker incentives, creating a sustainable reward structure independent of BTC/STRK exchange rate fluctuations—a design choice that minimizes systemic risk.

Positioning Starknet in the BTCfi Movement

By integrating Bitcoin staking, Starknet is carving out territory in the emerging BTCfi sector. Bitcoin holders gain a new utility: earning STRK rewards while maintaining BTC exposure. For the network, the move deepens liquidity pools and strengthens cross-chain participation, essential ingredients for any Layer 2 aiming to compete in DeFi.

The timing aligns with Starknet’s broader technical roadmap. Version 0.14.0, launching September 1, introduces decentralized sequencing powered by Tendermint consensus, reducing block times to 4-6 seconds and improving censorship resistance. The update also deploys a new fee mechanism inspired by Ethereum’s EIP-1559 standard.

Recent developments show Starknet doubling down on DeFi infrastructure: the Extended perpetual trading DEX and partnerships like Travala integration expand the ecosystem’s practical applications.

Market Reality: Wait-and-See Mode

Interestingly, STRK’s price told a different story on announcement day. The token dropped 6.2%, currently trading at $0.08 according to latest data. This price action suggests the market remains skeptical until the feature goes live, or traders view the staking launch as priced in. Bitcoin, meanwhile, holds steady near $90.83K.

The gap between governance enthusiasm and market sentiment reveals a common pattern in crypto: approval doesn’t always equal immediate adoption. Starknet’s real test begins when Bitcoin staking actually launches and on-chain metrics reveal actual participation levels.

The SNIP-31 vote represents institutional-level thinking—combining technical sophistication with governance discipline. Whether Bitcoin holders embrace this new staking outlet will determine whether Starknet becomes a flagship BTCfi platform or remains a niche experiment.