BitVault Finance

BitVault Finance is a comprehensive DeFi platform built on Starknet that bridges native Bitcoin to enable secure staking, lending, and yield farming with privacy-preserving features.

Comment

BitVault Finance - Hackathon Submission

Inspiration

The inspiration for BitVault Finance came from recognizing that Bitcoin, despite being the most valuable and trusted cryptocurrency, remains largely isolated from the rapidly growing DeFi ecosystem. We saw Bitcoin holders missing out on yield opportunities while their assets sat dormant. The challenge was clear: how can we unlock Bitcoin's potential in DeFi while maintaining the security, privacy, and decentralization that Bitcoin users value?

We were particularly inspired by Starknet's zero-knowledge capabilities and Cairo's expressive smart contract language, which provided the perfect foundation to build a secure, scalable Bitcoin DeFi platform. The hackathon's Bitcoin Unleashed track aligned perfectly with our vision of creating the first comprehensive Bitcoin DeFi vault on Starknet.

What it does

BitVault Finance is a comprehensive cross-chain DeFi platform that transforms idle Bitcoin into yield-generating assets through four core modules:

🔗 Bitcoin Bridge Enables trustless Bitcoin-to-Starknet bridging using atomic swaps and SPV proofs Mints wrapped BTC tokens that can be used across the Starknet ecosystem Provides secure withdrawal mechanisms back to native Bitcoin

🏦 Smart Vaults Creates multi-asset vaults supporting BTC, ETH, and STRK Enables automated BTC staking with real-time yield calculations Implements emergency withdrawal mechanisms for user protection Supports both conservative and aggressive investment strategies

📈 Yield Optimizer Automatically rebalances portfolios based on changing APY rates across protocols Executes cross-protocol yield farming with risk-adjusted strategies Compounds rewards automatically to maximize returns Provides transparent performance tracking and fee management

🔒 Privacy Mixer Implements zero-knowledge transaction mixing for anonymous Bitcoin transfers Uses Merkle tree commitments with nullifier tracking Enables unlinkable transactions through ZK-SNARK proof verification Protects user privacy while maintaining compliance capabilities

How we built it

Smart Contract Architecture (Cairo) We built four interconnected smart contracts using Cairo 2.11.4:

Vault Manager: Core business logic for vault creation, deposits, withdrawals, and staking BTC Bridge: Handles cross-chain Bitcoin operations with SPV proof validation Yield Optimizer: Implements automated portfolio rebalancing and yield farming strategies Privacy Mixer: Provides zero-knowledge privacy features using Merkle trees

Integration Strategy We leveraged multiple partner protocols to create a comprehensive ecosystem:

🟡 Xverse Wallet: Primary Bitcoin wallet integration for seamless UX ⚡ Atomiq: Cross-chain swap infrastructure for BTC/STRK/ETH atomic swaps 🏛️ VESU Protocol: Lending/borrowing integration across all 3 subtracks (Best UX, Mobile DeFi, Yield Wizard) 📊 Troves: Yield aggregation and liquid staking services 🔐 OpenZeppelin: Security-first smart contract libraries and standards

Frontend Development Built with Next.js 14 and TypeScript for type safety Integrated @starknet-react for seamless wallet connectivity Implemented Tailwind CSS for responsive, mobile-first design Created a Progressive Web App (PWA) for mobile optimization Added comprehensive testing environment with mock balances

Development Tools Scarb 2.11.4: Cairo package manager and build tool Starkli: Contract deployment and interaction CLI WSL Ubuntu: Cross-platform development environment Git: Version control with comprehensive documentation

Challenges we ran into

Technical Challenges Cairo Version Compatibility: Migrating from Cairo 2.3.0 to 2.11.4 required extensive refactoring of OpenZeppelin components and storage patterns Cross-Chain Integration: Implementing secure Bitcoin bridging required deep understanding of SPV proofs and atomic swap mechanisms Wallet Connectivity: Achieving seamless integration between Starknet wallets (Braavos/ArgentX) and Bitcoin wallets (Xverse) presented unique UX challenges Network Configuration: Resolving Sepolia testnet connectivity issues and RPC version compatibility (v0.7 → v0.9)

Design Challenges Complex State Management: Coordinating state between multiple DeFi protocols while maintaining data consistency Privacy vs. Transparency: Balancing zero-knowledge privacy features with regulatory compliance requirements Mobile Optimization: Creating an intuitive mobile DeFi experience that works seamlessly across devices

Integration Challenges Multi-Protocol Coordination: Synchronizing yield strategies across VESU, Troves, and Atomiq protocols Error Handling: Implementing robust error recovery for complex cross-chain operations Testing Infrastructure: Building comprehensive testing environments for multi-chain functionality

Accomplishments that we're proud of

🏆 Technical Achievements Complete Smart Contract Suite: Successfully built and deployed 4 interconnected Cairo contracts totaling over 1,500 lines of code Cross-Chain Bridge: Implemented a working Bitcoin-to-Starknet bridge with atomic swap capabilities Zero-Knowledge Privacy: Created a functional privacy mixer using Merkle trees and nullifier tracking Mobile-First DeFi: Delivered a responsive, PWA-optimized interface that works seamlessly on mobile devices

🤝 Integration Excellence Multi-Protocol Integration: Successfully integrated with 5 major partner protocols (Xverse, VESU, Atomiq, Troves, OpenZeppelin) VESU Triple Integration: Covered all 3 VESU subtracks with sophisticated UX flows, mobile optimization, and yield wizardry Wallet Ecosystem: Achieved seamless connectivity with both Starknet wallets (Braavos, ArgentX) and Bitcoin wallets (Xverse)

🎯 User Experience Intuitive Interface: Created a user-friendly DeFi interface that makes complex operations accessible to mainstream users Comprehensive Testing: Built mock testing environments that allow full functionality testing without requiring testnet tokens Error Resilience: Implemented robust error handling and recovery mechanisms

📚 Documentation & Code Quality Comprehensive Documentation: Created detailed README, deployment guides, and technical documentation Clean Architecture: Followed best practices with modular, maintainable code structure Security Focus: Integrated OpenZeppelin security standards throughout the application

What we learned

Technical Insights Cairo Development: Gained deep expertise in Cairo smart contract development, including component patterns, storage optimization, and event handling Cross-Chain Architecture: Learned the complexities of building secure bridges between Bitcoin and Starknet ecosystems DeFi Protocol Integration: Understanding how to coordinate multiple DeFi protocols while maintaining security and user experience Zero-Knowledge Implementation: Practical experience implementing privacy features using Merkle trees and cryptographic proofs

Product Development Mobile DeFi UX: Learned the critical importance of mobile optimization in DeFi applications User-Centric Design: Understanding how to balance technical complexity with intuitive user interfaces Testing Infrastructure: The value of comprehensive testing environments for complex multi-chain applications

Ecosystem Understanding Starknet Capabilities: Deep appreciation for Starknet's zero-knowledge capabilities and Cairo's expressiveness Bitcoin Integration Challenges: Understanding the unique technical requirements for Bitcoin cross-chain integration Protocol Interoperability: Learning how different DeFi protocols can work together to create enhanced user experiences

What's next for BitVault Finance

🚀 Immediate Roadmap (Q1 2025) Mainnet Deployment: Launch on Starknet Mainnet with full security audits Advanced Yield Strategies: Implement ML-driven yield optimization algorithms Enhanced Privacy Features: Add additional zero-knowledge privacy layers Mobile App: Launch native mobile applications for iOS and Android

🔗 Protocol Expansions (Q2-Q3 2025) Multi-Chain Support: Extend to Ethereum, Polygon, and other L2 networks Advanced Bitcoin Features: Support for Lightning Network integration Institutional Features: Multi-signature wallets and institutional-grade reporting Governance Token: Launch BVAULT governance token with DAO features

🏛️ DeFi Ecosystem Growth (Q4 2025) Lending Protocol: Launch native BitVault lending/borrowing markets Insurance Integration: Partner with DeFi insurance protocols for enhanced security Synthetic Assets: Enable synthetic Bitcoin exposure across multiple chains Advanced Derivatives: Options, futures, and structured products for Bitcoin

🌍 Long-term Vision (2026+) Global Adoption: Become the primary gateway for Bitcoin DeFi across all major chains Regulatory Compliance: Work with regulators to ensure compliant global operations Enterprise Solutions: B2B products for financial institutions and corporations Bitcoin Standard: Establish BitVault as the gold standard for Bitcoin DeFi infrastructure

🔧 Technical Enhancements Formal Verification: Complete formal verification of all smart contracts Scalability Optimization: Implement advanced scaling solutions for high-throughput operations Interoperability Protocols: Build bridges to emerging blockchain ecosystems AI Integration: Advanced AI-driven portfolio management and risk assessment BitVault Finance represents just the beginning of Bitcoin's journey into the broader DeFi ecosystem. We're committed to building the infrastructure that will unlock Bitcoin's full potential while maintaining the security and decentralization principles that make Bitcoin special. 🚀

Built With

  • atomiq
  • bitcoin
  • btc
  • cairo
  • defi
  • eth
  • openzeppelin
  • scarb
  • starknet.io
  • strk
  • troves
  • vesu
  • wallet
  • xverse
Share this project:

Updates