Bitcoin and DeFi, the new frontier

In the past six months, Starknet has recorded impressive growth in the decentralized finance (DeFi) sector, with the total value locked (TVL) nearly doubling: from $155 million to $310 million.

This surge has been primarily driven by the influx of “bridged” bitcoin, stablecoins, and STRK tokens in staking, outlining a new scenario for the DeFi ecosystem on this Layer-2.

Starknet, developed by StarkWare and launched in November 2021, is based on zero-knowledge proofs (STARK) and the Cairo Virtual Machine. As a ZK-rollup, Starknet executes transactions offchain, bundling them into STARK proofs that are then verified on Ethereum. The platform also supports native account abstraction, making each account a programmable smart contract, with advanced features such as social recovery and custom authentication.

Rising TVL: Bitcoin and Stablecoins Take Center Stage

The expansion of TVL on Starknet has been driven by staking programs and the influx of new liquidity in bitcoin. In November 2025, the TVL reached 321.2 million dollars, marking a 10.5% increase since the beginning of the year and a significant recovery from the lows of August, coinciding with the “BTCFi” initiative.

Among the main assets are nearly 130 million dollars in “bridged” bitcoin (including SolvBTC, WBTC, LBTC, and tBTC) and 147 million in stablecoins, used by users for trading and lending. On the DeFi front, the TVL is concentrated on derivatives, lending, and staking strategies. Extended (derivatives) and Vesu (lending) together represent over 160 million dollars, while the native staking contract STRK is the main pool of locked value with 120 million.

This growth reflects a clear trend: users are shifting from passive strategies, such as staking, to more dynamic solutions like lending, in search of sustainable yields and capital rotation opportunities.

Lending and borrowing: how bitcoin becomes productive

Lending protocols on Starknet allow users to deposit assets (earning interest) and others to borrow them (paying interest). Loans are generally overcollateralized: borrowers must deposit collateral exceeding the loan value. This system enables bitcoin holders to obtain liquidity without selling their assets.

For example, a user can deposit WBTC on Starknet and borrow stablecoins like USDC, using bitcoin as collateral. Beyond simple borrowing, many users adopt advanced strategies to amplify returns, such as looping.

Looping: multiplying returns

Looping involves borrowing stablecoins against deposited bitcoin, purchasing more bitcoin (or derivatives), redepositing it as collateral, and repeating the cycle. Each iteration increases the collateral and thus the yield, net of loan interest. On Starknet, protocols like Vesu and Troves.fi offer automated vaults for looping, making this strategy accessible even to less experienced users. However, looping carries risks: if the price of bitcoin falls, positions may be liquidated.

Carry Trade: Exploiting Interest Rate Differentials

Another popular strategy is the carry trade, which aims to profit from the interest rate differential between two assets. On Starknet, bitcoin holders can borrow stablecoins at very low rates (thanks to STRK incentives and low loan demand) and invest them in activities offering higher returns, such as stablecoin farming. In some cases, the effective cost of borrowing USDC against bitcoin has been close to zero, while returns on stablecoins have reached 5-10%.

The DeFi Ecosystem of Starknet: Protocols and Innovation

The Starknet ecosystem has been enriched with numerous protocols that leverage these opportunities:

1. Extended: decentralized exchange for leveraged perpetual futures.
2. Ekubo: AMM with concentrated liquidity and modular architecture.
3. Vesu: permissionless lending protocol, optimized for BTCFi, with STRK incentives and competitive interest rates.
4. Uncap Finance: borrowing protocol in Liquity v2 style, focused on the USDU stablecoin, fully backed by bitcoin.
5. Opus: cross-margin lending platform for advanced users, with APY ranging from 2% to 7%.
6. Re7 Yield Aggregator: a fund that employs advanced strategies to generate returns on bitcoin, with advertised APYs of up to 20%.
7. Noon: yield-bearing stablecoin protocol, allowing users to deposit bitcoin or USDC to mint sUSN and enhance returns through looping.
8. AVNU and LayerAkira: High-performance DEX aggregator and spot trading platform.
9. Ready, Braavos, Xverse: wallets with integrated Earn products, for easy access to BTCFi strategies.
10. Starknet Earn: a front-end that aggregates the main BTCFi strategies into a single interface.
11. Focus Tree: a studio developing consumer apps on Starknet, with over one million onboarded users.

The 100 million STRK incentive program (September 2025 – March 2026) supports these activities, aiming to make Starknet the most cost-effective platform for borrowing stablecoins against bitcoin. The idea is that once the incentives end, the critical mass of users will continue to use the protocols organically.

Ready: the first crypto-native neobank on Starknet

The evolution of DeFi on Starknet doesn’t stop at lending. With Ready (formerly Argent), the first true crypto-native neobank is born: a platform that allows users to deposit, earn, and spend crypto assets in a simple and self-custodial manner.

Ready enables direct bank transfers from over 150 countries, fiat-crypto conversion without centralized exchanges, and, thanks to integration with Due, the use of personal vIBANs to receive stablecoins directly into the Starknet wallet. Additionally, Ready has launched a self-custodial debit card linked to Visa/Mastercard, with payments converted in real-time from crypto to fiat. Integration with Google Pay is already active, while Apple Pay will arrive in January 2026.

This means that a user can:

1. Deposit bitcoin on Starknet via bridge or wrapper.
2. Earn yield on bitcoin through staking, lending, or products like mRe7BTC.
3. Directly spend rewards (e.g., STRK) via the Ready card for daily purchases, without ever leaving the Starknet ecosystem.

Everything happens quickly, cost-effectively, and without centralized intermediaries, thanks to sub-cent transactions and advanced account abstraction features.

Starknet: the new onchain bank

The growth of Starknet demonstrates that bitcoin can be much more than a passively held asset. The ecosystem encourages active use, borrowing, spending, and structured yield strategies, transforming bitcoin into a productive asset within a self-custodial DeFi. With tools like Vesu, Uncap, Ready, and Starknet Earn, the platform is building a true onchain bank: a user-owned financial system that combines yield, liquidity, and payments, without centralized intermediaries.

Starknet’s vision is clear: to make bitcoin not just an asset to hold, but a resource to use, invest, and spend in real life, thanks to an accessible, secure, and innovative DeFi infrastructure.