Shielded BTC Collateral

Privacy collateral layer for bitcoin in decentralized-finance environments, built on Starknet. Instead of storing the actual deposited amount, the contract holds only a mathematical signature of it. The user can prove to any application that their coverage exceeds a given threshold without revealing the amount. Withdrawals require a secret key that prevents both duplication and forgery of deposits.

The bitcoin-as-collateral market in decentralized finance moves over half a trillion dollars, but today exposes the full position on a public blockchain. This lets bots front-run liquidations, turns large holders into attack targets, and blocks institutions that cannot reveal strategy. Anyone wanting to use bitcoin as collateral has to choose between privacy and access to these applications.

Works in four steps. The deposit only stores the cryptographic commitment of the amount, never the number itself. The proof demonstrates that the collateral exceeds a protocol-defined threshold without learning the exact value. Withdrawal verifies the signature and prevents double-spending. There is also an integration point for lending, where debt can be issued against the private position. The entire flow runs on Starknet-native smart accounts that accept temporary sessions and charge fees in an asset separate from the deposit.

Presented at the Starknet Re{define} Hackathon 2026 on the Privacy and Bitcoin tracks. Before submission, an internal audit identified and fixed two critical vulnerabilities, eight high-severity issues and seven medium-severity ones.