Doubling in a Day: Stacks Founder Interprets the STX Bitcoin Layer 2 Concept

Original author: Stacks founder muneeb

Original compilation: 0x711, BlockBeats

The founder of the Bitcoin Layer 2 network Stacks, muneeb, shared the development history and vision of Stacks on his social platform. BlockBeats has translated and organized it as follows:

Stacks is an open-source project initiated by Bitcoin builders. The developers behind it have extensive experience in building applications and protocols based on the Bitcoin network.

After the block size wars in 2017, it became clear that the only way to scale transactions or new use cases on Bitcoin was to build a layer on the Bitcoin network. Thus, the work on the Lightning Network and Stacks began.

Stacks is a Bitcoin Layer 2 that supports smart contracts. It has a separate ledger to store data outside of Bitcoin L1, allowing developers to build any application on it. Anything that can be built on Ethereum or Solana can also be built on Stacks L2. Feel free to read the latest documentation on Stacks.

The initial version of Stacks launched in early 2021, using the secure programming language Clarity, which has the capability to read the state of the Bitcoin network and facilitate atomic swaps between BTC and any L2 asset. The initial version also had some bottlenecks. Subsequently, Stacks updated to the Nakamoto version.

The next version, set to launch this year, will introduce a decentralized BTC peg that will allow for easy transfers of BTC into or out of Stacks L2. Additionally, this version will undergo security upgrades, with finality determined by 100% Bitcoin hash power. Finally, this version will also enhance block speed, no longer constrained by Bitcoin block time.

The work on decentralized BTC pegs is actively being built by open-source developers. The goal is to unlock $500 billion in BTC funds. Just as Ordinals contributed to Bitcoin NFTs, sBTC can bring significant changes to Bitcoin DeFi.

Comparison of Stacks and Lightning Network

Stacks and the Lightning Network are both Bitcoin Layer 2 networks. The Lightning Network is a P2P network for payments; Stacks is more like an L2 chain for fully expressing smart contracts.

Utility of STX

The release of STX received approval from the SEC, which was unprecedented at the time. The project achieved decentralization before the mainnet launch, now with over 30 independent entities and developers. STX is used as miner rewards and sBTC peg-out signer rewards; its role is to maintain decentralized mining and signing. After the launch of sBTC, users will be able to use sBTC on most wallets and applications.

NFTs on Stacks L2

There is an active community of artists and creators on Stacks L2. People have minted 650,000 Bitcoin NFTs on Stacks L2. All these NFTs are automatically hashed to Bitcoin L1 and protected by Bitcoin in a scalable manner. Additionally, many NFT builders are active on Bitcoin L1 using Ordinals, such as Gamma.io and Satoshibles.

Comparison of Ordinals and L2 NFTs

Ordinals based on Bitcoin L1 and L2 NFTs are complementary. Ordinals are inherently limited by L1's scalability, while L2 provides a clear path for expansion. Wallets like Xverse and Hiro Wallet currently support Ordinals.

DeFi on Stacks L2

Currently, contracts on Stacks L2 have locked up $250 million and distributed 2,200 Bitcoin as rewards to users. You can follow ALEX and Arkadiko Protocol. Similar to Bitcoin NFTs, Bitcoin DeFi is still in its early stages.

Stacks is a decentralized ecosystem that is constantly changing and growing. For more updates, please continue to follow the official Stacks page.