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Bitcoin's DeFi Ecosystem Expands with zk Rollups, Covenants, and Starknet Integration

Coin WorldTuesday, Mar 11, 2025 1:45 pm ET
1min read

Bitcoin's programmability is rapidly advancing without the need for changes to the Bitcoin Core code. This evolution is driven by new solutions that enable zk rollups, covenants, and full DeFi ecosystems on the Bitcoin network. These developments are significant as they allow for the scaling of Bitcoin to thousands of transactions per second, introducing features like yield farming, staking, and lending, all without the need for protocol changes.

One of the key players in this space is Xverse, a popular Bitcoin wallet, which has announced its upcoming integration with Starknet. Starknet, originally an Ethereum-native Layer 2 solution, is now expanding its reach to Bitcoin. By positioning itself as "Bitcoin’s execution layer," Starknet aims to provide a seamless DeFi experience to Bitcoin users without the need for contentious opcode upgrades. This move is part of a broader push to unlock Bitcoin’s smart contract potential without altering the protocol.

This push began with research breakthroughs such as BitVM, followed by Starknet-backed ColliderScript, and most recently, Bitcoin PIPEs. Bitcoin PIPEs (Polynomial Inner Product Encryption) is a particularly ambitious project backed by Polychain Capital. It has developed a cryptographic method to verify zk-SNARKs on Bitcoin without new opcodes, offering a trust-minimized alternative to existing solutions. The key promise of PIPEs is to reduce the verification process to checking Schnorr signatures, thereby sidestepping Bitcoin’s script limitations using cryptography.

Misha Komarov of cryptography research and development company [[alloc] init] explains the significance of this approach: "What can we verify on Bitcoin? We can verify signatures. We turn the zk verification into a signature verification," thus avoiding contentious opcode upgrades. While this method is currently expensive to compute, it proves that zk rollups and covenants do not require a protocol change. Komarov sees PIPEs as a potential replacement for BitVM, which relies on challenge-response mechanics for trust-minimized bridging to off-chain layers. PIPEs offer a single-transaction verification method, providing instant finality.

Bitcoin PIPEs is also an alternative to ColliderScript, developed by Starknet researchers to enable covenants on Bitcoin without a fork. Starknet has pitched this as a stepping stone to its broader Bitcoin expansion, which includes the upcoming Xverse integration. StarkWare CEO Eli Ben-Sass

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CaseEnvironmental824
03/11
Misha's approach simplifies zk verification. Turning it into signature checking is pure genius. 🤓
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PikaZoz123
03/11
PIPEs might be the game-changer. Trust-minimized and fast verification? That's a win for everyone.
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JoinMySpaceship
03/11
@PikaZoz123 Agreed, PIPEs look promising.
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Far_Sentence_5036
03/11
Starknet going to Bitcoin is like $TSLA going electric. Evolution in motion, no need to fork. 🤔
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crentony
03/11
@Far_Sentence_5036 Agreed, evolution in motion.
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acg7
03/11
@Far_Sentence_5036 Think Starknet's move will pump BTC?
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skarupp
03/11
Xverse integrating Starknet is a game-changer. Bitcoin's DeFi scene is heating up without needing protocol changes. 🚀
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Fluffy-Belt1325
03/11
@skarupp What do you think about Bitcoin PIPEs?
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acg7
03/11
$BTC scaling issues? Not with these rollups and covenants. No fork needed, just pure innovation.
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Ubarjarl
03/11
@acg7 Scaling issues? Solved. Next?
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howtospellsisyphus
03/11
Xverse + Starknet = 🔥 combo for Bitcoin DeFi. Can't wait to see how this changes the game. 🚀
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Gix-99
03/11
Starknet expanding beyond Ethereum is a power move. They're seriously making Bitcoin more versatile.
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SuperNewk
03/11
@Gix-99 Agree, Starknet's move is lit. Bitcoin gains.
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coinfanking
03/11
@Gix-99 Starknet expanding? Meh, just another hype train.
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NRG1788
03/11
Xverse + Starknet = 🚀 Bitcoin DeFi moonshot?
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Jimmorz
03/11
@NRG1788 Think it'll pump soon?
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Medical-Truth-3248
03/11
Xverse going all-in with Starknet could shake things up. Bitcoin's DeFi scene is getting spicy. 🚀
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whoisjian
03/11
zk rollups on Bitcoin? Game-changing, op-code-free.
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Puzzleheadbrisket
03/11
@whoisjian Really? Let's see.
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sobfreak
03/11
Holding $BTC and loving these developments. DeFi on Bitcoin without forks? That's a long-term bullish signal.
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lookingforfinaltix
03/11
@sobfreak How long you been holding BTC? You think these developments will pump the price soon?
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Ok-Memory2809
03/11
Holding $BTC, waiting for PIPEs magic.
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Dvorak_Pharmacology
03/11
BitVM and ColliderScript got nothing on Bitcoin PIPEs. Polychain Capital's play could redefine Bitcoin's potential.
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battle_rae
03/11
zks-SNARKs on Bitcoin without opcodes? 🤯 That's some next-level crypto wizardry. Misha's team is onto something big.
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user74729582
03/11
Bitcoin's programmability is the real MVP.
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