A Brief Analysis of Satoshi's Upgrade for Stacks: Enhancing Performance and Introducing sBTC

Author: Sleeping Crazy in the Rain

I previously mentioned the BTC ecosystem and specifically talked about Stacks and the Nakamoto upgrade. Today, I will continue this topic and discuss the Stacks project.

First, let’s quickly go over the basic information about Stacks. (Stacks is an old project, so we can just take a brief look at this information.)

From my personal perspective, $STX will never be absent from the market's speculation on the BTC ecosystem, but previous speculation felt more like a "castle in the air," lacking a foundation. After the Nakamoto upgrade, Stacks will provide the market with higher expectations through improved performance and sBTC.

So, what exactly has the Nakamoto upgrade improved?

1. Performance

Previously, Stacks' block confirmation time followed Bitcoin's (PoX consensus mechanism), with a block time of about 10 minutes. This means that as a Bitcoin Layer 2, Stacks was inadequate; while it inherited Bitcoin's security, it did not enhance performance sufficiently on top of Layer 1.

However, after the Nakamoto upgrade, according to Grayscale's calculations, Stacks' block time and Gas fees have decreased from 6 min/6.65 u to 5 s/0.25 u.

Higher performance means a better user experience, and a better experience translates to greater attraction for users and developers. This will become the foundation for the development of the Stacks ecosystem. For example, trading memes on Stacks was quite exhausting before, but it will be much easier now. We can also see more possibilities for Stacks DeFi, such as a wider range of DeFi products and participants.

Additionally, Stacks is optimizing the Nakamoto upgrade to achieve lower latency and higher bandwidth. Refer to this article

In terms of ideas, Stacks is still committed to addressing the previous shortcomings to achieve higher performance. Only with higher performance can it compete with other high-performance Layer 1/Layer 2 solutions.

2. $sBTC

Speaking of DeFi, after the Nakamoto upgrade, the sBTC upgrade is expected to occur in early December (at the earliest), with more upgrades planned for January and beyond. The Nakamoto upgrade lays the foundation for the sBTC upgrade, and the early December upgrade will optimize the Stacks token issuance mechanism and launch sBTC.

By the way, I hope it doesn’t get delayed like the Nakamoto upgrade.

After the upgrade, sBTC could potentially become one of the important assets in the crypto market (the previous issues with $WBTC also helped the development of cbBTC and sBTC, and Coinbase has delisted $WBTC).

For sBTC, the most noteworthy aspect is its adoption metrics. We can see that Stacks is actively promoting the adoption of sBTC, such as collaborating with Bitcoin ATM operator Coinflip to integrate Stacks and sBTC, and introducing sBTC to Aptos, Solana, etc.

For sBTC, the growth model of cbBTC is very worth referencing. For example, supporting Moonwell with the $WELL token (and pumping $WELL) as rewards to promote the adoption of cbBTC. (Moreover, Stacks is quite wealthy; they recently completed a new financing round of $20 million, and they can definitely use their funds to incentivize the adoption of sBTC, such as on lending protocols in Stacks, Aptos, and Solana.)

Overall, the expectations for Stacks are still positive: the Nakamoto upgrade has brought higher performance and introduced sBTC as a core asset of the Stacks ecosystem, and Stacks' strong capabilities have further enhanced the adoption expectations for sBTC.

Finally, on a side note. Recently, many public chains have been upgrading, such as Fantom Sonic and Avalanche 9000, with the core goal of promoting public chain adoption. It can be anticipated that the next few months will be quite exciting, as the public chain battle is about to begin again~