Liquid Bitcoin Yield Engine

Inspiration

We noticed that over $1 trillion worth of Bitcoin sits completely idle. Bitcoin holders want to earn yield, but the process is overwhelming. Moving BTC into DeFi protocols requires multiple swaps, bridge transfers, managing seed phrases across different chains, and paying gas fees in unfamiliar tokens like ETH or STRK. This friction alienates most users, especially those new to crypto. We asked ourselves: What if earning yield on Bitcoin could be as simple as depositing money in a savings account? That question became our mission.

What it does

The Liquid Bitcoin Yield Engine is a mobile-first dApp that makes Bitcoin yield accessible with one click. Users deposit Bitcoin from Layer 1 or the Lightning Network and immediately start earning yield from top Starknet protocols like Vesu and Troves. When they need liquidity, they withdraw instantly back to the Lightning Network. The entire experience is Bitcoin-native. No seed phrases. No gas fees. No network switching. Users see their balance and APY in BTC terms, with all Starknet complexity hidden behind the scenes.

How we built it

Our team met every single day throughout the month-long hackathon for stand-up meetings. These daily check-ins kept us aligned, accountable, and moving forward even when we hit roadblocks. Our tech stack includes:

Cairo smart contracts for the core yield engine logic on Starknet, managed by Scarb React frontend optimized for mobile with a Bitcoin-focused interface AVNU paymaster for sponsored gas fees Atomiq SDK for seamless Lightning Network connectivity

The architecture automatically routes user funds to high-yield protocols while maintaining instant liquidity through Lightning integration.

Challenges we ran into

Abstracting Starknet Complexity: Starknet is powerful but intimidating for Bitcoin users. We had to hide all blockchain terminology so users only see Bitcoin balances and APY—nothing about smart accounts, STRK tokens, or transaction hashes. Making Transactions Truly Gasless: Gas sponsorship sounds simple until you implement it. We automatically convert a tiny portion of each deposit to USDC to fund future transactions through the paymaster, all without the user noticing. Getting this balance right took many iterations. Lightning Network Integration: Building a seamless bridge between Lightning and Starknet required deep integration with the Atomiq SDK. We spent countless hours debugging edge cases around deposit confirmations and withdrawal timing.

Accomplishments that we're proud of

We created a genuinely gasless experience where users never think about transaction fees. The AVNU paymaster integration works flawlessly, automatically funded by a portion of deposits converted to USDC. We successfully bridged three different ecosystems—Bitcoin Layer 1, Lightning Network, and Starknet—into one seamless user experience. Users can move between these networks without understanding the technical details. Most importantly, we maintained our commitment to daily stand-ups throughout the entire month. This discipline kept our team coordinated and productive, even when facing difficult technical challenges.

What we learned

Abstraction is the key to adoption. The best products don't expose their complexity—they hide it. Bitcoin users shouldn't need to understand Starknet to benefit from it. Daily stand-ups create momentum. Committing to meet every day for a month created accountability and kept us moving forward. When someone got stuck, the team rallied to help. When we made breakthroughs, we celebrated together. Account Abstraction is revolutionary. Smart accounts, session keys, and paymasters can eliminate almost every friction point in DeFi. We barely scratched the surface of what's possible. Cross-chain infrastructure is maturing. Just a year ago, building this project would have been nearly impossible. Tools like Atomiq SDK and AVNU paymaster made the "impossible" achievable in one month.

What's next for Liquid Bitcoin Yield Engine

Multi-Strategy Vaults: We want to offer users different risk/reward profiles. Conservative users could choose lower-yield, safer strategies, while experienced users could opt for higher-yield opportunities. Automated Yield Optimization: Implement smart contract logic that automatically rebalances funds across protocols based on real-time APY data, maximizing returns without user intervention. Expanded Network Support: Integrate additional Bitcoin Layer 2 solutions and other Lightning-compatible networks to give users more deposit and withdrawal options. Social Recovery: Add trusted contacts as guardians who can help users recover their accounts if they lose access to their WebAuthn credentials. Native Mobile Apps: Build dedicated iOS and Android applications with push notifications for yield updates and withdrawal confirmations.

Built With

• atomiq
• cairo
• javascript
• react
• xverse