Starkware announced in June the creation of a Bitcoin research fund, in particular with the aim of evaluating the implementation of OP_CAT, to what end?
OP_CAT is an element that has existed in the Bitcoin system since its inception. In fact, Bitcoin has a kind of virtual machine (VM), although it is far less sophisticated than Ethereum's. It does, however, allow certain operations to be carried out via "opcodes". One of these opcodes is OP_CAT, which allows you to concatenate, in other words to link two elements together. Technically, this operation is simple, but it has been the subject of much debate and controversy.
In 2010, Satoshi Nakamoto disabled several of these opcodes, including OP_CAT, after identifying vulnerabilities that could be exploited to saturate the network or cause node failures. At the time, Bitcoin was still in a very fragile phase, and this decision was taken in a hurry to protect the network, which was, no doubt, the right choice in this context.
Today, more than 14 years later, new discussions are emerging around the reactivation of OP_CAT. Why? Because even such a minor change could open up new possibilities for Bitcoin, not least by enabling advanced constructs like the roll-ups found on Ethereum. This could enhance Bitcoin's scalability and enable solutions like ZK Roll-ups to be implemented. In short, it would significantly improve network efficiency while maintaining decentralisation and security, fundamental principles of Bitcoin.
👉 Read also: what are the big challenges of Bitcoin?
If OP_CAT were implemented, what would it allow Bitcoin to do?
If OP_CAT is reactivated, it would effectively allow the Bitcoin network to be scaled. This could allow the arrival of DeFi on Bitcoin, even if some members of the community do not want it. More complex applications could be developed, which is a huge advantage, because today few developers have mastered Bitcoin Script. Reinstating OP_CAT would allow the use of more accessible programming languages such as Cairo (developed by Starkware and implemented at Starknet, editor's note), paving the way for a new wave of innovation on Bitcoin.
However, it also raises the question of whether this will lead to the arrival of undesirable elements such as memecoins (read our investigation into this trend) or AMMs (Automated Market Makers), since this would unlock new use cases on Bitcoin.
Doesn't this endanger the security of Bitcoin's Layer 1 if transactions migrate to L2s?
It's true that if transactions migrate to L2s, this could reduce fees on Layer 1, which would pose security issues for the network, as fewer transactions would mean fewer rewards for miners. However, I think this will depend on how L2s are adopted and the volume of activity generated. Even if Layer 1 is used less directly, L2s will pay a fee to use Layer 1, and that could maintain the balance. It's a topic for further exploration, but certainly one that the Bitcoin community will need to take a serious look at.
And right now, miners, what do they think about OP_CAT?
Honestly, I'm not entirely sure where they stand right now. What's interesting is that I had a chat with Sébastien Gouspillou, a big player in Bitcoin mining, and the reality is that he didn't even know what it was, which shows that it's still not widely discussed among miners. This may seem surprising, as their business depends directly on changes to Layer 1, but it also shows that they don't always get involved in these discussions about soft forks, at least not at the moment.
"More and more voices are starting to recognise the potential benefits of OP_CAT" In your opinion, how long could the discussions around OP_CAT last? Are we talking several years?
Frankly, we'd love to have a clear answer to that, but it's really hard to predict. However, I would say that the current context is rather favourable to these discussions. Two years ago, this kind of debate on OP_CAT would not even have been possible. But today, there is a sort of renaissance in the Bitcoin community, a willingness to see what can be improved while remaining true to the essence of Bitcoin.
In terms of timing, it will obviously take a lot more debate and research to convince users that OP_CAT is not only beneficial but above all secure. More and more voices are beginning to recognise the potential benefits of OP_CAT, which is already a good sign. We have already proved that it is technically feasible, and other players are also working on different approaches. Now the real question is: how will the Bitcoin community as a whole react? It's not just the developers or researchers, but also the users who run the nodes and are very involved in keeping Bitcoin secure.
Bitcoin users are more involved in these discussions than Ethereum users?
Yes, that's one of the strengths I find really unique about Bitcoin. Users care deeply about every change on the network. Whereas on Ethereum, the "social layer" is mainly made up of developers and researchers, and the users themselves are much less involved in discussions about changes to the protocol. Ethereum is evolving rapidly, and this leaves little room for users to get involved in these debates. Everything moves so fast that users are often not even aware of changes until they are implemented.
In contrast, with Bitcoin, the pace of change is much slower, and every decision is scrutinised. Bitcoin users, especially those operating nodes, have much more direct control over the future of the network. They are the real custodians of Bitcoin, and they don't take these decisions lightly. I think that's very healthy, because it shows that they have a real concern for preserving the fundamentals of Bitcoin.
Starkware has a somewhat singular position in the Ethereum ecosystem, not least because you have your own Cairo programming language. Now you're funding research into Bitcoin. How do you manage this situation within the Ethereum community?
It really is a delicate balance to maintain, and indeed we get criticism from both sides. On the one hand, we're not seen as being 'aligned' with the rest of the L2s on Ethereum because we don't use the Ethereum Virtual Machine (EVM) and have developed our own language, Cairo. On the other hand, in the Bitcoin community, we are sometimes seen as 'shitcoiners' simply because we came from Ethereum and are still very much involved in it. It's a difficult position to be in, but at the same time it reflects our willingness to go where we think the technology can have the most impact, regardless of what others think.
From the beginning, we've made technical choices that seemed very risky, even misunderstood by the industry. But so far, history has often proved us right. For example, there was a lot of scepticism surrounding our choice to use Starks instead of Snarks for ZK technology (two forms of zero-disclosure proof of knowledge, editor's note). But today, more and more projects, including those that initially used Snarks, are adopting Starks. This shows that even though we often seem to be out of step, our choices end up being validated by the industry.
👉 Read also: What lies ahead for Ethereum and its token?
"If someone proves that OP_CAT is dangerous to the network, then we will abandon our efforts" Won't Starkware-funded research bias the outcome in your favour?
What's important to us is that we're trying to advance technology for the good of Bitcoin, not for our own personal gain. That's why we fund research around OP_CAT, regardless of whether it's in our favour or not. If someone proves that OP_CAT is dangerous for the network, then we will abandon our efforts, even if it means that we will have invested a lot of time, money and energy in something that will not materialise.
There is a certain revival around Bitcoin scaling. We could mention BitVM, Citrea, Alpen Labs and others. Do all these solutions seem relevant to you?
Actually, we're seeing a real renaissance with lots of projects looking to scale Bitcoin. But as always, with this kind of revival, there are projects of varying degrees of seriousness. To be honest, perhaps 90% of these solutions are not really L2. They may look interesting on the surface, but they don't really solve the problem. Among the serious and legitimate projects, I'd say Citrea, Alpen Labs, BitVM, and ARK are the ones that really stand out. They don't require a soft fork, which gives them a definite advantage, as they could be deployed more quickly.
However, we have our own approach, and although it's taking longer, not least because of the need for a soft fork for OP_CAT, I think we're staying on the right track. We've never tried to go faster at the expense of safety. We've always wanted to build something solid, even if it costs us time and energy.
👉 See also: Analysis of Layers 2 Bitcoin
There are also some projects that use synthetic bitcoin solutions on Ethereum or Solana, such as Coinbase, which has launched its own version (cbBTC, editor's note). What are your thoughts on this?
Synthetic Bitcoins are a very tricky subject. On the one hand, they may allow a degree of flexibility in the use of bitcoins on other chains, in particular to facilitate interactions with decentralised finance applications (DeFi). But on the other hand, it does add risk on top of risk. Today, existing synthetic Bitcoin solutions are often based on models with fairly high trust assumptions, such as the need to have a central committee or actor that guarantees the convertibility of synthetic Bitcoin into real Bitcoin.
And that's where it becomes problematic. For me, Bitcoin's ultimate goal is to remain as decentralised as possible. As soon as you add intermediaries who manage trust or centralised processes, you lose part of what makes Bitcoin strong. At Starware, we take a very different approach. We are working on solutions that allow you to have synthetic Bitcoins or Bitcoins on Layer 2, but in the closest possible way to a native Bitcoin. We want users to be able to retrieve their bitcoins directly from Layer 1, without having to trust a third party. That's why we're putting a lot of effort into developing techniques like 'force withdrawal', which allows users to recover their Bitcoins even if Layer 2 is no longer working.
Are you already working on testnet?
Yes, exactly. On testnet, we've already started testing some of these solutions, in particular the implementation of our ZK Rollup technology. The idea is really to create a bridge between Bitcoin and these Layer 2s, while maintaining a maximum level of security. On the testnet, we've proved that it works, but we still need to refine a few things, particularly on the final design that will enable us to have a fully operational 'force withdrawal' solution.
That said, even though we've made significant progress, there are still challenges to overcome before we can deploy this solution on the mainnet. We don't want to rush things. As I mentioned, our approach has always been to put security first. We've seen too many projects in the crypto space that have taken shortcuts to move faster, and this has often led to major security issues later on. That's not a path we want to take.
👉 Interview - Sankha Banerjee (Babylon): "Offering a new source of return to bitcoin holders"
Are you not afraid of spreading yourself too thin with all these projects? How do you manage this risk of spreading yourself too thin on several fronts?
That's an excellent question, and it is indeed a risk that we have to manage carefully. We have a lot of projects on the go, and every one of them is important. But as I told you, we have a long-term vision, and that sometimes means making difficult decisions in terms of priorities.
Today, our number one priority remains Starknet and the adoption of this Layer 2 on Ethereum. We've made huge progress on this front, and I think we now have the best Layer 2 solution on the market. With the latest update we rolled out, Starknet is now the cheapest solution for transactions, with fees of around $0.001 for a transfer, which is really impressive. It's even cheaper than Base, which is quite incredible because, technically, a ZK Rollup is supposed to be more expensive to operate.
But beyond the fees, we've also worked on the speed of transactions, and today we're able to have confirmation times of between one and two seconds. All this to say that, even though we have a lot of projects running in parallel, we remain very focused on adopting and improving Starknet. And we have a dedicated team for each project, so we don't spread ourselves too thin.
👉 Read also: Layers 2 Ethereum, state of play and challenges
"The staking we're proposing will be done in two stages" And in terms of the roadmap for the next few months, what are the main objectives for StarkNet?
The roadmap for the next few months remains primarily focused on continuous performance improvement, although, frankly, with StarkNet's current capabilities, we're already ready to handle much greater demand than we see today. We can already process up to 500 transactions per second with extremely low fees, so from a technical point of view, we're ready for mass adoption.
However, another very important focus of our roadmap concerns the ecosystem. We have a very strong community of developers, but what we're still lacking is a certain business maturity. We want to help these developers get to the next stage by supporting them, providing them with resources and tools so that they can really build viable and disruptive applications. It's a bit sad sometimes, because we have incredibly talented builders who are creating great things, but nobody knows about it, nobody sees them. So our aim is to help them structure themselves better and make themselves better known.
👉 Read our fundamental analysis of Starknet
There are already applications on Starknet that are making news, such as the Argent wallet. Could you say a little more about that?
Absolutely, Argent is an excellent example of what Starknet can offer. Their partnership with Mastercard and their crypto payment card has really created a 'wow' effect. It's a significant step forward, and it shows what's possible with Starknet. They've managed to create a solution that's not just a technological innovation, but also a practical and accessible product that can really transform the way we use crypto-currencies on a daily basis.
This is exactly the kind of application we want to see more and more of on Starknet. Projects that combine technological innovation with concrete usefulness for users. And I think we're just getting started.
Starkware has submitted a proposal to add STRK governance token staking. What does this entail and what are the next steps?
Staking is a key feature to further decentralise the StarkNet network. Basically, the idea is to allow users to 'stake' their token to secure the network and, in return, receive rewards. We've already made the proposal to the community, and now the governance has to vote on whether or not to validate this feature.
But it's important to note that the staking we're proposing will take place in two stages. The first stage is what we call "centralised" staking. What this means is that although users will be able to store their tokens and participate in securing the network, we will initially remain the sole operators of the sequencer. This allows us to control the process a little more closely, especially in the early stages of deployment.
Then, in a second stage, we will activate full decentralisation of the sequencer. This means that several entities will be able to manage the sequencer, not just Starkware. We have already started work on this decentralisation phase in collaboration with a team called Informal Systems, which is very well known in the Cosmos ecosystem. They are helping us to adapt their consensus algorithm, Tendermint, to make it compatible with our specific needs as ZK-Rollup.
The long-term idea is for Starknet to become completely decentralised, but this needs to be done in stages to ensure that everything works perfectly and securely. It's a major transition, but a necessary one, because decentralisation is at the heart of what we want to achieve with Starknet.
This 'security first' philosophy implies a certain slowness in development, do you regret that the market doesn't value your efforts? STRK has fallen 76% since its launch in February...
That's an interesting question. Honestly, I don't think so, the market doesn't always value this effort fairly, at least in the short term. You're right to say that it's often the projects that go fast, that take shortcuts, that attract the most attention and capital. We've seen this with some of our competitors on Ethereum, who have moved very quickly to be first to market, sometimes to the detriment of security.
But we really believe that in the long term, this "security first" approach will pay off. This is particularly true for Bitcoin. On Ethereum, some people may be more willing to compromise on security to get features faster. But on Bitcoin, the community is much more conservative, and rightly so. Bitcoiners don't want solutions that aren't fully secure, and that's why I'm convinced that our approach will be much more accepted in that ecosystem.
And even on Ethereum, we're already seeing signs that this trend might be changing. More and more people are realising that security is paramount, especially when millions or even billions of dollars are at stake. So yes, in the short term, we may have fallen behind certain projects that have taken shortcuts. But in the long term, I think we'll be rewarded for choosing not to compromise our principles.
