Starknet, an Ethereum Layer 2 network, on May 12 launched strkBTC, an ERC-20 token backed 1:1 by Bitcoin that brings shielded balances and confidential transfers to its smart contract environment.
"This is private digital cash — the way it should be," Eli Ben-Sasson, CEO of Starknet developer StarkWare and a co-founder of Zcash, said in a statement. "A strkBTC economy will allow users and institutions to shield balances, which is much needed for the sake of our rights, our safety, and to drive adoption too."
The token uses Starknet's zk-STARK cryptography and is the first asset built on the new STRK20 privacy framework, which allows users to switch between a public, transparent mode and a shielded mode that hides balances and transaction amounts. The launch comes as security firm CertiK recorded a 41 percent increase in verified physical attacks on crypto holders globally in 2026 through early May, with attackers reportedly using AI to link public wallet data to real-world identities. To balance privacy and compliance, strkBTC provides viewing keys that can grant scoped access to auditors or regulators in response to lawful requests.
The launch makes Bitcoin a productive, privacy-preserving asset within Starknet's decentralized finance ecosystem from its first day. Liquid staking layer Endur simultaneously launched xstrkBTC, a liquid staking token that routes the shielded asset into immediate use as collateral on the Vesu lending protocol, for automated market maker yield on Ekubo, and for future automated strategies on Troves.
"xstrkBTC is the first proof point that yield, composability, and shielded state can sit in the same token," said Akira, co-founder of Endur. "It will not be the last. As more STRK20 assets come online, the LST stack expands with them."
The strkBTC initiative is part of Starknet's broader strategy to activate Bitcoin's vast but largely passive liquidity within its DeFi ecosystem. While the initial version functions as a wrapped asset, which requires trusting a custodian, the project's roadmap includes integrations to decentralize this trust. Future work involves using BitVM to reduce trust assumptions through a 1-of-N security model and a longer-term goal of a fully trustless two-way bridge, which may become possible if a proposed OP_CAT soft fork is implemented on the Bitcoin network.
For institutions and funds that have largely avoided DeFi due to the transparency of public blockchains, the compliant privacy model of strkBTC aims to unlock new use cases, from confidential treasury management to private payroll.
This article is for informational purposes only and does not constitute investment advice.
