Over the past several months, a new narrative has been quietly gaining momentum: BTCFi on Starknet.
Bitcoin is a $1.4T asset, yet less than 1% of it is productive in DeFi. It represents the largest pool of liquidity in crypto, but has historically had limited use beyond holding and trading. DeFi unlocked productive capital for Ethereum, but Bitcoin-native capital remains largely untapped. That is beginning to change.
On Starknet, a growing ecosystem of protocols is putting BTC to work through staking, lending, borrowing, and automated yield strategies, creating the permissionless infrastructure Bitcoin has long been missing. The early data points to something significant: this activity is not theoretical. It is happening on Starknet, and it is growing.
Ekubo, Starknet’s leading AMM DEX, has seen average daily transactions increase by 46% since BTCFi launched. Vesu, Starknet’s leading money market, has seen transactions more than double over the same period.
Why?
For the first time, we are seeing an ecosystem of protocols, liquidity providers, and strategists working cohesively to produce structured products around yield. And they’re offering some of the most attractive rates currently available for BTC lending and borrowing. From lending markets like Vesu, to trading infrastructure like Ekubo, Extended, and AVNU, to yield products from Re7, to BTC staking via Endur, the foundations of Bitcoin DeFi are coming together.
The Early Signals of BTCFi Adoption
One of the most encouraging trends since BTCFi activation on Starknet has been consistent growth in usage over time.
Across the ecosystem, key indicators show steady expansion:
- BTC collateral deposited into lending markets has grown steadily since launch
- USDC borrowed against BTC has increased month over month
- The number of active loans backed by BTC has continued to rise
- On-chain transaction activity has materially increased across DeFi protocols
This kind of growth pattern is important. Rather than seeing a one-time spike followed by inactivity, the data suggests persistent engagement and increasing participation. BTCFi on Starknet is not just attracting liquidity. It is creating ongoing financial activity.
How to Earn With Bitcoin on Starknet
At the center of BTCFi is a simple idea: Bitcoin should be able to work.
On Starknet, BTC can now move through a productive capital cycle:
- BTC is bridged into Starknet
- It can be staked via Endur to earn yield
- It can be deposited as collateral on lending markets like Vesu
- Users borrow stablecoins such as USDC against their BTC
- That liquidity flows into trading markets like Ekubo or yield strategies like Re7
This creates a powerful economic loop. Instead of idle BTC sitting in wallets, capital becomes collateral, liquidity, and yield-generating assets across the network. And the data suggests users are beginning to use this system exactly as intended.
Bitcoin Lending and Borrowing: Using BTC as Collateral
One of the clearest indicators of product-market fit is the growth of BTC-backed borrowing.
Since October:
- BTC collateral deposited into Vesu has consistently increased.
- USDC borrowed against BTC has grown month over month.
- The number of outstanding loans backed by BTC continues to grow.
Even during periods of market volatility, this trend continued. Borrowers continued opening positions and using BTC as productive collateral. That kind of resilience is a strong signal that users are actively relying on these markets, not simply testing them.
Most of this activity has naturally concentrated around wrapped BTC, which currently captures the majority of user engagement across lending markets. That concentration is not surprising. In early-stage ecosystems, liquidity tends to cluster around the most established assets. What matters more is the broader trend: BTC-backed lending is gaining traction.
Stress-Tested: BTC Lending During Market Volatility
Because of February’s volatile market movements, BTC-backed lending markets on Starknet experienced 56 liquidations, representing over half a million dollars worth of BTC. All liquidations were sustained. No bad debt occurred, demonstrating that when market crashes happen, our DeFi rails can endure the stress of sudden liquidation cascades.
Why Starknet Leads BTCFi
All of these trends point to a larger narrative forming: Starknet is becoming one of the most compelling environments for Bitcoin yield.
What makes this possible isn’t any single protocol. It’s the coordination across the entire ecosystem:
- Endur introduces BTC staking and liquid staking tokens
- Vesu enables BTC-backed lending markets
- Ekubo provides deep trading liquidity
- AVNU uses NEAR intents for cross-chain swaps
- Re7 builds structured yield strategies and vaults
- ForgeYields has built the vault infrastructure that serves as the backbone for many yield products across the Starknet ecosystem
Alongside these protocols, strategy builders like 0D Capital are actively designing and deploying yield strategies across the ecosystem, helping translate on-chain liquidity into structured opportunities for users.
Early innovators are also pushing the frontier. Noon built one of the first purely economically generated yield vaults on Starknet, demonstrating how real yield strategies can emerge directly from on-chain financial activity rather than incentives alone.
New ecosystem contributors are also helping strengthen the lending layer. Clearstar has joined as a curator within the Vesu lending and borrowing markets, helping manage risk parameters and guide the development of sustainable lending markets.
This ecosystem coordination also extends to key asset partners:
- Threshold has supported the integration of decentralized BTC infrastructure and helped enable new pathways for Bitcoin liquidity to participate in Starknet’s growing BTCFi ecosystem through Noon’s TBTC vault.
- Solv has been collaborating with the Starknet ecosystem to expand BTC wrapper integrations and deepen Bitcoin-native liquidity across Starknet DeFi markets.
- WBTC (Wrapped BTC) with over $8B market cap, brings the most liquid wrapped Bitcoin in DeFi to Starknet.
Together, these builders, infrastructure providers, and asset partners form the foundation of a capital flow system where BTC can move seamlessly between staking, lending, trading, and yield strategies.
Building the BTCFi Flywheel
The long-term vision for BTCFi on Starknet is straightforward.
- BTC enters the ecosystem
- BTC is staked or used as collateral
- Borrowed liquidity flows into trading and yield strategies
- Those strategies generate fees and economic activity
- That activity attracts more capital
Over time, this cycle compounds. More capital leads to deeper markets. Deeper markets lead to better yields. Better yields attract more BTC.
What’s Next for Bitcoin DeFi on Starknet
Bitcoin will always be crypto’s largest asset. What’s missing is the infrastructure that unlocks its ability to participate fully in permissionless finance. That’s changing on Starknet and the data shows it: growing collateral, expanding lending markets, increasing borrowing demand, and real onchain activity that survived its first stress test.
The flywheel is early, but it’s spinning.
