Here we report on the progress of the leading builders in the zkBitcoin ecosystem, documenting recent significant releases, technical breakthroughs and general updates
Featuring: @StarkWareLtd/@Starknet, @GOATRollup, @citrea_xyz, @fiamma_labs, @ZeroSync_, @build_on_bob, @FairGateLabs, @layeredge, @babylonlabs_io, @BTC_OS, @nubit_org, @fractal_bitcoin, @TheTNetwork, & @TaprootWizards
Staking
@Starknet has proposed enabling Bitcoin staking using wrapped BTC tokens, allowing BTC holders to earn STRK rewards: https://community.starknet.io/t/snip-31-bitcoin-staking-on-starknet/115696
The protocol plans to adjust validator power to include both STRK and BTC, capped at 25% BTC influence. Rewards are issued in STRK without affecting its APR, increasing protocol inflation slightly, and only approved BTC wrappers are allowed. Security measures include entry delays and emergency delisting for compromised wrappers. Launch is planned for Q3 2025.
BTCFi
Starknet is now live on @XverseApp, allowing Bitcoin users to access Starknet features directly from the wallet. Users can swap BTC and STRK, track Starknet tokens, pay transaction fees with any supported token, and view all transaction history.
The integration aims to expand Bitcoin DeFi by enabling low-cost swaps, lending, and BTC-backed assets: https://x.com/Starknet/status/1940041793506025974
Additionally, @caddyfi has launched on Starknet, offering automated Bitcoin vaults with APYs from 4% to 10%. Users can choose from three strategies - ranging from low to high risk - all backed by institutional liquidity and RFQ execution, aiming for smart, scalable BTC yield generation: https://x.com/caddyfi/status/1940260464543281266
Finally, USDC is now available on the @MagicEden marketplace, with transactions routed through @dot_swap: https://x.com/Starknet/status/1936106921863372802
Tech
@StarkWareLtd has launched a dedicated space for its Bitcoin-focused projects, featuring a new GitHub organization and website. The initiative includes developments like a ZK Bitcoin client in Cairo, Script VM, trustless block-template verification, and post-quantum signatures, all tailored to Bitcoin: https://x.com/StarkWareLtd/status/1935744756241318184
Tech
@GOATRollup has made progress with BitVM3 ZK verification on Bitcoin using a new Label Forward Propagation method: https://goat.network/blog/goat-network-brings-bitvm3-into-practical-use
This approach allows encrypted computations to be verified on-chain with minimal data, utilizing reusable garbled circuits. This will enable more scalable ZK apps on Bitcoin, from financial tools to AI proof attestations and cross-chain validation.
Media
On a recent episode of @HouseofZK Radio, Dr. Redouane Elkamhi, Chief Economist at GOAT Network, discussed the importance of pegging yield to BTC, the role of decentralization in creating sustainable, trust-minimized yield infrastructure, and how GOAT’s model could support the economic needs of sovereign nations and institutions in a Bitcoin-native future: https://x.com/HouseofZK/status/1937178714090983795
Tech
@citrea_xyz released an article explaining its role in advancing BitVM2, a more efficient successor to BitVM for verifying SNARK proofs on Bitcoin: https://blog.citrea.xyz/citreas-role-in-achieving-verification-on-bitcoin-with-bitvm/
By optimizing arithmetic for elliptic curves, improving hashing functions, and developing chunking strategies, Citrea helped overcome Bitcoin Script’s limitations. The team also enhanced signature methods using Winternitz and supported TMUL integration for faster calculations.
These contributions underpin Citrea’s bridge, Clementine, which enables scalable, secure, and collateral-efficient Bitcoin interoperability using BitVM2.
The project also shared an article explaining how its Bitcoin Light Client lets smart contracts verify Bitcoin’s consensus through SPV proofs: https://x.com/citrea_xyz/status/1935006237097070671
Every Citrea node runs a Bitcoin full node, ensuring trustless access. This design enables new Bitcoin-integrated applications like overcollateralized BTC lending, atomic swaps for smaller users, and miner-incentive systems for non-standard transactions. By making Bitcoin consensus verifiable on-chain, Citrea opens the door to building secure, decentralized apps anchored directly in Bitcoin’s network.
Testnet
Citrea continues to expand its ecosystem with the launch of innovative protocols on its zlRollup testnet:
• @nectraxyz: Provide transparent, permissionless Bitcoin-backed loans through nUSD, a soft-pegged stablecoin fully collateralized by BTC, enabling users to turn their Bitcoin into a yield-generating asset without relying on fiat, centralized custody, or multi-asset collateral, with an incentive program launching soon: https://x.com/citrea_xyz/status/1935713596215828798
• @caddyfi: Offer structured BTC yield via the wcBTC vault on Citrea’s ZK rollup, allowing users to lock Bitcoin for two months and earn passive returns through automated strategies, while benefiting from Citrea’s Bitcoin-native security and preparing for the upcoming launch of the cBTC vault: https://x.com/caddyfi/status/1937080839398949247
Tech
@fiamma_labs has introduced the Isolated Safe™ architecture, where each user's assets are stored in separate vaults, eliminating shared attack surfaces and making mass breaches nearly impossible: https://medium.com/@Fiamma.io/billions-in-bridge-hacks-every-year-but-weve-finally-found-the-cure-isolated-safe-architecture-7e8196dd0652
This approach follows an in-depth analysis of major blockchain bridge hacks, including Ronin, Multichain, and Harmony, which resulted in billions in losses. Fiamma identified recurring vulnerabilities: centralized key management, weak security practices, and social engineering. The new architecture directly addresses these issues, offering a more secure method for storing and managing digital assets.
Integrations
Fiamma announced two new integrations that deepen its BitVM-powered Bitcoin bridge network:
• @pharos_network: linked its BitVM2 bridge to Pharos Network, bringing native BTC liquidity into RWAFi markets and other DeFi modules. Users can now move Bitcoin trustlessly, earn yield on idle holdings, and test the flow via Fiamma’s Pharos Testnet, opening a secure pathway for cross-chain operations: https://x.com/fiamma_labs/status/1935587717309739255
• @BNBCHAIN: enabled seamless, trust-minimized transfers of native BTC into the BNB ecosystem, giving access to a network of 1.6 million users and roughly $5.7 billion in DeFi TVL. The integration lets Bitcoin holders tap BNB Chain’s dApps and liquidity while preserving Bitcoin’s security through Fiamma’s BitVM bridge: https://x.com/fiamma_labs/status/1937480590254834001
@robin_linus, Creator of BitVM & @ZeroSync_, co-authored a paper along with @alexeiZamyatin, @zetavar1, @lukas_aumayr, @matteo_maffei, the @SecPrivTUWien team, Orfeas Thyfronitis Litos and @dntse introducing a new Bitcoin bridge using BitVM2: https://eprint.iacr.org/2025/1158
This light-client based system enables trust-minimized transfers between Bitcoin and second layers. Unlike multi-signature bridges, BitVM2-BRIDGE requires only one honest participant per role.
BitVM2-CORE allows arbitrary programs to be verified on-chain via fraud proofs. A working implementation has been tested on Bitcoin mainnet, confirming feasibility with reasonable costs and strong security guarantees.
Research
@alexeiZamyatin, Co-founder of @build_on_bob, together with @robin_linus, @zetavar1, @lukas_aumayr, @matteo_maffei, the @SecPrivTUWien team, Orfeas Thyfronitis Litos and @dntse released a paper (https://eprint.iacr.org/2025/1158) introducing BITVM2-BRIDGE, the first light-client-based bridge for Bitcoin: https://x.com/alexeiZamyatin/status/1936282721317220725
This design allows trust-minimized transfer of BTC between Bitcoin and L2 systems using BITVM2-CORE, a protocol enabling arbitrary program execution on Bitcoin. Unlike existing multi-signature bridges, BITVM2 requires only one honest participant in each role - signer, operator, and challenger- to ensure security.
A production implementation ran successfully on Bitcoin mainnet, showcasing real-world feasibility. Several startups are now building on this foundation.
Progress
@build_on_bob published their Status Report #2 in which they outline updates on BitVM and progress toward trust-minimized Bitcoin bridges and rollups: https://bitvm-acc.org/assets/BitVM_Status_Report_bitvmacc_June_2025-B_r-RP_f.pdf
Key points include:
• BitVM2 challenges - High costs, capital inefficiency, and complex infrastructure needs.
• BitVM3 development - New fraud-proof model using Garbled Circuits, cutting on-chain data by 1,000x.
• TOOP protocol - Aims to improve capital efficiency but increases off-chain data size.
• Operator role split - Separates capital provision from technical duties.
• Hybrid L2s - Combine Bitcoin’s security with EVM compatibility for broader interoperability.
Tech
@FairGateLabs, in partnership with @rootstock_io, has launched Union Bridge - a trust-minimized bridge connecting Bitcoin and Rootstock using BitVMX: https://fairgate.io/post/14-union-bridge-a-trust-minimized-bitcoin-bridge
Unlike centralized bridges, Union enables secure BTC transfers without intermediaries. It relies on fraud proofs, ZK tech, and a watchtower system to ensure integrity. This design preserves Bitcoin’s trustless ethos while enabling smart contract interoperability and broader DeFi use across blockchain networks.
In addition, @jony_altszul, CEO of Fairgate, explined how Garbled Circuits are opening new avenues for scaling Bitcoin, particularly through the BitVMX platform: https://x.com/jony_altszul/status/1938349274716393752
By offloading most computation offchain, they significantly cut onchain costs and reduce round complexity to a single interaction. However, this shift comes with challenges, including massive offchain data storage (5TB+) and high computational demands. Fairgate has quietly advanced this work and plans to share more soon.
Tech
@layeredge have posted a thread explaining how parallel aggregation trees allow ZKPs to be verified concurrently rather than linearly: https://x.com/layeredge/status/1936796937229115847
Subtrees process separate proof sets in parallel and merge recursively into one succinct proof. This enables efficient scaling across threads, GPUs, or clusters. It's used in ZK Rollups, oracles, and ML inference, forming the foundation of LayerEdge’s architecture.
Audit
LayerEdge Foundation has completed independent audits of its EDGEN staking infrastructure through top security firms @sherlockdefi and @CertiK. The audits, finalized in May and June 2025, aim to verify the system’s security and reliability.
Full reports are available for public review: https://x.com/layeredgefndn/status/1938322527581048897
Integrations
@babylonlabs_io Genesis is integrating EVM alongside its existing CosmWasm VM to support Bitcoin-based DeFi. This dual-VM setup combines Bitcoin compatibility via Rust (CosmWasm) with EVM’s established DeFi tools and user base. Both VMs will share a token ledger, ensuring full interoperability. Users can access BTCFi using either BABY or EVM (0x) addresses. The EVM mainnet launch is expected by late Q3 to early Q4 2025: https://babylonlabs.io/blog/babylon-genesis-dual-vm-model
Additionally, @krakenfx has integrated the Babylon Bitcoin staking protocol, allowing users to stake BTC directly from their accounts while maintaining full custody of their assets. The Bitcoin never leaves its native chain, and rewards are issued in BABY, Babylon Genesis’ token. The process is transparent, verifiable via Bitcoin script, and includes a seven-day unbonding period. This marks Kraken’s first offering of native BTC staking: https://babylonlabs.io/blog/kraken-integrates-babylon-bitcoin-staking-protocol-for-btc-staking
Audit
Babylon’s Q2 2025 Genesis v2 upgrade has successfully passed a full security audit by @informalinc: https://x.com/babylonlabs_io/status/1934755367659200759
The results confirm improved Bitcoin staking security, more efficient upgrade procedures, and enhanced support for future cross-chain integration, strengthening the platform’s technical reliability and scalability.
@BTC_OS has partnered with @bitdcaOFFICIAL to streamline Bitcoin ownership from traditional finance to on-chain use: https://x.com/BTC_OS/status/1938228254349136247
BitDCA enables passive Bitcoin savings through everyday spending, while BitcoinOS makes those assets usable across blockchains without bridges or custodians.
The collaboration aims to support secure, verifiable, and practical Bitcoin adoption using ZKPs and decentralized financial tools.
With UTXO bundling and the integration of the USD1 stablecoin through the Thunderbolt protocol, @nubit_org is helping Bitcoin is shift from a slow settlement network to a platform for instant payments and applications: https://blog.nubit.org/bitcoin-thunderbolt-the-most-important-bitcoin-upgrade-in-a-decade-1ce64116e411
UTXO bundling enables off-chain transfer of coin rights, reducing fees. USD1 is the first stablecoin to run natively on Bitcoin’s mainnet without bridges or external trust.
@fractal_bitcoin has outlined its mid-2025 roadmap, focusing on improving core infrastructure, expanding Bitcoin-native applications, and strengthening community and developer support: https://fractalbitcoin.io/updates/fractal-2025-mid-year-roadmap
Q3 will bring node upgrades, simplified brc-20 transfers, and new liquidity and developer programs. In Q4, Fractal plans opcode experiments, Alkanes protocol support, and enhanced ecosystem tools.
Future efforts include integrations like PizzaSwap and bridging improvements, all aimed at responsibly scaling Bitcoin use and functionality.
@TheTNetwork has added @tBTC_project to a new lending platform by @Re7Labs, built on @GearboxProtocol: https://x.com/TheTNetwork/status/1937873898911260784
Users can lend or borrow tBTC to engage in DeFi strategies, including up to 6x leverage via uptBTC from @MezoNetwork. The platform offers single-sided deposits with no lockups or custody risks. All operations take place through isolated credit accounts to enhance security.
@Gate_io has published an article highlighting @TaprootWizards, now a leading NFT collection on the Bitcoin blockchain: https://gate.com/blog/8871/Taproot-Wizards--The-2025-State-of-Bitcoins-Premier-NFT-Collection%3Futm_source=chatgpt.com
Built on the Ordinals protocol, the project features 2,121 unique digital assets that combine artistic expression with technical innovation.
With plans to reintroduce OP_CAT to enable smart contracts and launch a Bitcoin-native decentralized exchange, Taproot Wizards is expanding the use of Bitcoin beyond a store of value. The collection illustrates Bitcoin’s evolving role in NFTs, DeFi, and the broader Web3 ecosystem.
