sBTC Updates - Weekly MegaThread

Working Groups
#10

This Week’s News & Stories - Mon, 08 May 2023

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Dear Bitcoiners,

The landscape around Ordinals and BRC-20s is rapidly evolving. In this issue, we’ll break down everything you need to know and why it matters for sBTC.

🚀 BRC-20 Mania: What’s all the hype about?

BRC-20 tokens provide a new standard for issuing and managing assets on the Bitcoin blockchain. The idea started as an experiment to see if Ordinal theory can facilitate fungibility on Bitcoin. Anyone can deploy, mint or transfer tokens using Ordinal inscriptions through a “First in, First out” model. It uses a format called JSON, which can be broken down like this:

Although BRC-20s are still in their early stages, their proof of concept has demonstrated strong demand for issuing assets on Bitcoin. In just two months, they have risen to over $500M in market capitalization and $10M in 24 hour trading volume. While the most popular BRC-20 tokens are meme coins like MEME and PEPE, this breakthrough could quickly expand to encompass tokenized real world assets.

📈 The Demand for Bitcoin Block Space is Exploding

So far, $14M total fees (USD) have been paid for inscribing Ordinals. Yesterday alone saw a record breaking $2.5M fees paid in a single day. In fact, Bitcoin transaction fees surpassed the block subsidy coinbase reward due to high demand for Bitcoin block space. This was a crucial moment, which demonstrated a path to long-term sustainability for Bitcoin’s security model.

🧠 What does this mean for sBTC?

Stacks is poised to serve as the scaling layer for Ordinals. As fees increase on Bitcoin L1, we anticipate more activity transitioning to L2. sBTC and sOrdinals are needed to move Bitcoin to L2 in a secure and decentralized way and unlock the full capability for Ordinals.

👉The Bottom Line: BRC-20 tokens have expanded the market opportunity for sBTC. It also shapes how we approach our go-to-market strategy. We’ll be following this trend closely to see how it evolves over the coming weeks and months. One thing is certain: excitement around building on Bitcoin is back 🧡

💻 Engineering Updates

  • ❤️ Will enabled the funding of Quarter 3 Critical Bounties for a total of 12 BTC and 240k STX!!

  • ❤️ Sergey submitted an ask to the Stacks Foundation for six engineers for one quarter to focus on build, testing and security infrastructure for sBTC.

  • ✅ Igor resourcing the Nakamoto workstream with engineers.

  • ✅ Hosted a design discussion to align and prioritize features for sBTC.

  • ✅ Aligned on sBTC terminology

    • Use Deposit instead of Peg-in or Wrap

    • Use Withdraw instead of Peg-out or Unwrap

    • Terminology aligned with Subnets and other bridges.

    • We are open for comments on this and otherwise will begin renaming references in code, design docs and white papers starting next week.

  • ✅ sBTC Alpha work is progressing and unblocked.

Workstream Updates

  • Testing Infra - Sergey Shandar

  • Bitcoin / DLC - Fernando Foy

    • ⚠️ We are still looking for a way to make it so that the borrower does not have to sign to refresh a DLC

    • Asks from other workstreams:

      • If someone knows of any additional and extensive DLC libraries, this would be helpful.

  • Blockchain - Mårten Blankfors

    • ✅ Unit tests for commit-reveal operations in Stacks

    • ⚠️ Reclaim path for commit transactions needs attention

    • ⚠️ StackerDB RPC interface stalled on technical issue (borrow-checker battle)

  • Crypto - Joey Yandle

    • ✅ Updated sBTC alpha contract

      • Added key IDs to signer data

      • Signer data map is keyed off signer id not key id

    • ✅ Updated frost with Jacinta

      • All integer types are no longer platform dependent

        • u32 or u64 as necessary

        • Casts to usize are now explicit and panic if failure

      • Signer ID for v1 is no longer fake

        • v1::Signer has u32 id field

        • ID is persisted and loaded

    • ✅ Updated core-eng with Jacinta

      • Config now tracks sBTC alpha contract changes

    • ✅ Onboarded new p256k1 contributor and reviewed/merged PR

      • Replaced base58 crate with bs58

        • base58 crate was not maintained and had no license in repo

        • Error types did not implement Display/Debug

          • This prevented wrapping the errors in types that did

    • ✅ Fixed audit branch

      • Adds comments throughout code to note issues

        • Places where we need to validate inputs

        • Possible vulnerabilities

        • Confusing code

      • Unfortunately it had an awkward merge from main

        • Required a difficult interactive rebase/squash/format

  • Bridge - Mike Cohen

    • See also Bridge’s GitBook updates page.

      • Committed PR 105 which tidies up code around building the commit tx. Several options currently co-exist and work will continue in subsequent PR.

      • Created a risk assessment on the requirements around commit.

      • Finished off web project CI - staging branch is now default for PRs - serves as a safety latch for production builds.

    • Asks from other workstreams:

      • Blockchain Work Stream for sync up on the commit / reveal / reclaim flow.

  • Signer - Jacinta Ferrant

    • ✅ Met with Igor to get contact info for requirements gathering/coordination with related critical bounties

    • ⚠️ Priorities still on Stacks Alpha Project

  • Stacks Foundation sBTC Bounties - Will Corcoran

    • ✅ Home Stretch: DeMining / DeStacking Pools

    • ✅ Proof of Concept: sBTC Electrum Integration concept

    • ✅ Awarded: Stacks-Signer for Mobile and ClarityGPT

    • ✅ Teamwork!: UX/UI on sBTC Bridge, Stacks-Signer, DeStack Pool, and Nakamoto Block Sim coming together here.

    • ⚠️ Flagged: Jacinta and @mxn flagging Stacks.rs WIP - plan to work with grantee @Rswol to expand scope accordingly

    • ⚠️ Audits: DeMine / DeStack first - all others at sBTC code completion

    • ❤️ Funded!: 3Q CBs (sBTC-related CBs = 12 BTC + 240k STX!! (thanks Igor and Sergey)

  • Bitcoin Builder Updates

    • @mårten#2709

      • Open PRs:

        • ✅ Draft: commit-reveal support in Stacks: stacks PR#3683

          • ⚠️ Initial SegWit support limited to p2wsh/p2tr nested in p2sh

          • ✅ Unit tests implemented

          • ⚒️ Working on integration tests

        • ⏸️ Contribution guidelines + DCO check: core-eng PR#292

          • On hold due to unresolved CLA uncertainty

        • ⏸️ Peg handoff wire format: stacks PR#3687

          • On hold due to Stacks hard fork

    • @Ӿoloki#3105

      • Merged p256k1 PR#59 rev version for crates.io

      • Reviewed p256k1 PR#60 switch base58 crate to bs58

      • Reviewed frost PR#102 Add persistent ID to v1::Signer

      • Reviewed frost PR#99 Make all usize into u32

      • Merged core-eng PR#311 Update sBTC contract to store key-ids per signer and use signer-ids as key for signer map

      • Reviewed core-eng PR#318 Update config to better match sBTC contract changes

⚒️ Go-To-Market Updates

  • Progress on sBTC design decisions, including how to handle transaction fees in the wallet

  • Collected feedback on oracles to provide additional tooling for sBTC builders

  • Exploring ecosystem workstream to support founders on sBTC

  • UX research workstream is kicking off this week

🌍 Around the Ecosystem

  • Stacks ecosystem continues to deliver:

  • Don’t forget your tickets to Bitcoin Builders Conference! I’ll be interviewing sBTC core developers Igor Sylvester and Joey Yandle

Signing Off,

Andre


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#11

This Week’s News & Stories - Mon, 22 May 2023

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Happy Monday Bitcoiners,

Last week in Miami was magical ✨. Builder culture has returned and you could feel it in the air. The most popular topics discussed were on ZK rollups, Trustless Bridges, Layer 2s & Ordinals. What a difference a year makes!

The week started off at the Bitcoin Builders Conference. I had the privilege of interviewing gigabrains Igor Sylvester and Joey Yandle for an sBTC technical deep dive. We covered threshold signatures, future scalability and much more.

Takeaways from the Conference:

Ordinals are accelerating Bitcoin. With higher sustained fees and block space demand, builders are racing to add functionality. We’re going to see an explosion of new use cases and applications being built. Ordinals also ensure Bitcoin is the unit of account for digital native transactions, which affirms its role as a monetary asset.

BRC-20s are here to stay. The discussion on long-term viability of BRC-20s was largely split due to its relatively inefficient design and reliance on indexers. However, my takeaway was that BRC-20s will evolve and new standards will emerge that become backwards compatible. Their MVP has shown real demand, but now it’s time to move beyond meme coins to real utility.

ZK rollups are coming to Bitcoin. Zero-knowledge proof systems can offer greater flexibility on top of Bitcoin’s base layer and introduce a range of novel applications. In the near-term sovereign rollups are coming, but it will take years for Bitcoin to implement the opcodes necessary for full ZK rollups.

Trustless Two-Way Pegs are the holy grail. This has been an elusive problem in the Bitcoin community. With the growth of sBTC, the market is starting to pay attention. This is good because it shows we’re working on the right problem, but also a reminder that speed and execution will be critical to protect our current lead.

Stacks is well positioned. Stacks has a strong community of product leaders and experienced developers. We have a head start extending Bitcoin’s functionality and builders that get involved now can capitalize on this next phase of growth.

👉In conclusion: Bitcoin is fun again and I am so excited to see what the community develops over the next few years.

Highlights from the Event:

💻 Engineering Updates

  • Testing Infra

    • WIP: CodeCoverage for p256k1 and WSTS.

    • Need to finalize Work Scope for Testing/Build/Security Engineers that will activate on July 1st.

  • Blockchain

    • Document, test and clean up commit-reveal PR

    • Getting some protocol updates through

      • Allow unpadded payloads in commit-reveal

      • Include a version byte in all sBTC data payloads

      • Length-prefix contract name string in deposit/peg-in payload

    • Test vectors with OP_DROP payloads

  • Clarity Eng

    • Can simulate mining Bitcoin blocks/transactions in Clarinet via testnet controller now.

    • First peg-in tests that check if the transaction was mined, extract peg information, and mint sBTC tokens. (Consuming taproot witness script.)

    • Bridge deposit unit tests will be updated.

    • Setting up POX-2 for Clarity-only testing.

    • Began peg-transfer processor contract.

    • Merge Clarity Bitcoin library very soon, in review.

  • Stacks Signer

  • Stacks-signer: UI & API for Dashboard

    • Merged two PRs related to Create typescript Bridge library. Creates a shared lib for the web and api projects containing the common functions.

    • Keeping User Stories and Trello Kanban board up to date.

🌍 Around the Ecosystem

  • Bitcoin Builders Conference Livestream (Link)

    • Note: The sBTC talk has not been posted yet. I’ll share the recording once I receive it.

  • Tweet thread: A technical primer based on "sBTC Technical Dive", by Kenny Rogers (Link)

  • BRC-20 tokens are now trading on ALEX and they are rapidly rolling out new trading primitives (Link)

Signing Off,

Andre


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#12

This Week’s News & Stories - Fri, 02 Jun 2023

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Dear Bitcoiners,

This week, the sBTC go-to-market group has been working on product research to improve the Bitcoin DeFi experience for users and developers.

For sBTC to be successful, it’s crucial that we understand user pain points and design solutions that meet their needs better than alternatives.

Here’s a summary of the work so far:

  • Four conversations with Stacks product owners to uncover assumptions and pain points.

  • Six conversations with people in Stacks, Bitcoin and Ethereum ecosystems to inform messaging guidelines.

  • Competitive research and product reviews to understand what’s on the market.

Over the next few weeks, we’ll be conducting user interviews and plan to publish a report with our findings. Below, I’ll go into more detail on our initial takeaways.

Target User: who is likely to care about our product?

The first question to ask when building a product is who are we building for? Two primary audiences we consider for sBTC are Bitcoin Holders and DeFi Users.

Our initial assumption is that Bitcoin holders and DeFi users have different views and motivations. For example, the former optimizes for security and sovereignty while the latter optimizes for experimentation and collective ownership. This is an assumption we will test through user interviews and research.

The rise of Ordinals has shown that there is a category of users who hold Bitcoin passively, but use Ethereum and Web3 protocols daily. This has revealed demand for productive use cases on Bitcoin, which was echoed in the latest State of Stacks Messari report.

Both user categories would like to earn yield on their Bitcoin with minimal friction; however, the value proposition for each group might be slightly different. With Bitcoiners, we may want to highlight the non-custodial and safety aspects of sBTC; whereas Web3 native users may care more about the competitive yield opportunities.

Early research suggests that Web3 native users are more likely to experiment with new protocols, whereas Bitcoin holders may be skeptical if there isn’t a “Bitcoin-first” experience (ie using a separate network and token).

We’ll publish more insights in the coming weeks and months as we conduct more interviews and test the UX flows for sBTC products.

Signing Off,

Andre

Special thanks to Elena Giralt for contributing to this post.

💻 Engineering Updates

  • Blockchain ⛓️

    • sBTC alpha testing is progressing.

    • Upgraded Alpha Stacks node to 2.4 consensus.

    • Fixed several minor bugs.

    • Currently lacking a deployed bridge UI.

    • Initial test-vectors for wrap/unwrap with commit-reveal are in place.

  • Clarity Eng 🔭

    • Major review of sbtc-stacking-pool.clar by Fernando and Marvin.

  • Crypto Eng ⚙️

    • Implemented Display and Debug for remaining p256k1 objects.

    • Updated frost-coordinator integration test to use code objects not binaries (link)

      • Improved code coverage from 49% to 65%.

    • Fixed a signature verification bug.

    • Discovered an inconsistency in HashMap iteration.

  • Stacks Signer 🖊️

    • Received feedback from the Clarity workstream on the signer diagrams.

    • Organizing meetings to finalize sBTC transaction flow design.

    • Initial Web UI for Stacks Signer is available for feedback.

    • Making progress on Android UI.

    • Received feedback on the WARP API and planning changes.

  • Stacks Grants 💰

    • Latest bridge work is complete here.

    • Working on implementing the design.

    • Added an API call to pull in balances for users' addresses.

⚒️ Go-To-Market Updates

  • New sBTC website is live with a refreshed brand and pitch deck.

  • User research interviews starting next week. Aligning with engineering on Bridge product testing.

  • Planning sBTC pitch competition mid-June. Stay tuned for details.

🌍 Around the Ecosystem


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#13

This Week’s News & Stories - Tue, 20 Jun 2023

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Dear Bitcoiners,

Bitcoin Summer is finally here! With new ETF rumors swirling, regular breakthroughs on Ordinals, and sBTC development in full swing, it’s off to an exciting start.

ICYMI

✅ Progress on sBTC Alpha testnet. sBTC brings Bitcoin liquidity to the Stacks layer. The protocol makes it easy to create Bitcoin applications that benefit from low fees, improved performance, and full smart contract capabilities. The sBTC working group is making great progress toward the roadmap. The following picture was taken on testnet using the Hiro Wallet.

🔗 Recursive Inscriptions. The latest breakthrough in Ordinals allows inscriptions to request and use data in other inscriptions. This reduces the data stored on-chain and allows for more expressive smart contract functionality. This thread does a great job of ELI5. In short, this unlocks more composeability for ordinals contracts and could enable powerful new use cases for Bitcoin.

🚀 New Hope for Bitcoin ETFs. Last week BlackRock officially filed for a spot Bitcoin ETF. BlackRock will be using Coinbase to custody the ETF. This is a big deal. BlackRock is the world’s largest asset manager and has an ETF approval record of 575-1. Given the SEC has denied every previous Bitcoin ETF application, will this time be different?

Regardless of what happens with the ETF, this summer is for building. With the explosion of new possibilities on Bitcoin, this is the best time to go heads down creating tools and applications. We’ve got you covered with a list of ideas to get started.

Signing Off,

Andre

💻 Engineering Updates

Blockchain

  • Successful implementation of sBTC alpha deposits.

  • Withdrawals are still in progress. Support is needed for the sBTC bridge app, including bug fixes #445 #447

  • Requests for other workstreams: introduce support for OP_RETURN withdrawals in the testnet sBTC bridge.

Testing Infra

  • Drafted plan for the sBTC Testing Team to improve and simplify the development process.

Clarity

  • Reviewing remaining pull requests and updating the roadmap. There’s on-going discussion how to optimize functionality for a minimum-viable product.

Crypto

  • Updated sBTC roadmap

  • Reviewed WSTS Audit and worked on WSTS Security Proofs

Signer

  • Progress on Android UI, incorporating sBTC bridge design scheme.

  • Mock API is nearly complete. Meetings scheduled next week to collect product feedback from key stakeholders.

Better Blocks

  • Organized Better Blocks tasks as a project board.

  • Pull request #3759 is in the review process, and work started on issue #3753.

Grants

  • Critical Bounties applications close on Tuesday, June 20th (Today). Don’t forget to submit!

sBTC Bridge:

  • Worked on OP_RETURN withdrawals for sBTC alpha.

  • Implementing the UI/UX design.

⚒️ Go-To-Market Updates

  • Updating the product roadmap to provide clear deliverables for 2023.

  • Completed 15 interviews for the user research study and preparing a report with the takeaways.

🌍 Around the Ecosystem


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#14

This Week’s News & Stories - Mon, 31 Jul 2023

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Dear Bitcoiners,

Bitcoin Summer is here and sBTC is sprinting ahead. There’s been a lot happening over the last few weeks, so let’s dive in.

ICYMI:

🏃‍♂️The sBTC working group kicked off a ten week sprint, focusing on critical areas of development and streamlining core engineering efforts.

The goals for the sprint are as follows:

  • ✅ sBTC v0.1 goes live as a smart contract — without consensus breaking changes. This will allow us to simplify the go-to-market and start testing under live conditions.

  • ✅ Nakamoto consensus changes, which significantly improve the speed and security of the Stacks network, go live on testnet.

  • ✅ Improvements to testing infrastructure

🎯 There has been significant operational changes to improve communication and collaboration across all contributors in the working group; as well as increased organization and clarity on project scopes.

🧠 This will allow us to ship safer, faster, better code.

🔗 The sBTC project board has moved to the new Core Engineering Github repo.

👉 For more information on the current sBTC engineering initiatives, check out the following documents:

Ready Layer 2: Bitcoin Pitch Competition

Ready Layer 2 is a Bitcoin Pitch Competition focused on generating new ideas and business models for sBTC. The event will be hosted virtually on August 18. Register here.

Q1 2023 sBTC Objective & Key Results

Here’s an overview of the objectives for Q3 2023.

Objective 1: Deliver sBTC Developer Release

sBTC version 0.1 is a developer focused release to enable early testing in live environments. This is a key step on the way toward the Nakamoto release that will support sBTC without consensus breaking changes.

Objective 2: Create an sBTC SDK for developers

This will allow us to validate and test future sBTC versions, and make it much easier for developers to integrate their apps with sBTC.

Objective 3: Engage participation in early sBTC releases

We aim to get early and iterative feedback on sBTC, to improve the core product and build sustained momentum over time.

🌎 Around the Ecosystem


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#15

This Week’s News & Stories - Thu, 24 Aug 2023

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Dear Bitcoiners,

Last week, the sBTC working group got together IRL for a hackathon that spanned contributors across all the major workstreams. The energy this week was electric — and the team made considerable progress on components of sBTC and the Nakamoto upgrade.

✍️ This week’s newsletter will highlight the wins and takeaways from the event.

Hackathon Recap

The Stacks community is full of humble geniuses spread around the world. On August 14, we logged off Zoom and descended on New York City for a week long hackathon. The event was an incredible reminder about what we can achieve together in-person.

💻 Day 1 | Tuesday, Aug 15

  • We kicked off the week with a brainstorming session on product requirements for the sBTC Signer. The Signer is responsible for validating block production under Nakamoto consensus and approving/denying deposits and withdrawals for sBTC. This set the tone for a productive week!

  • Next, we laid out the goals for the week and formed teams focusing on:

    1. sBTC Signer

    2. Block Producer Signer & Stacks Signer

    3. Clarity Wasm

  • Jude shipped an implementation of StackerDB — the communication protocol that enables Stacks nodes to query each other. This helped unlock a lot of downstream work for the rest of the teams.

  • I presented a workshop on sBTC’s product-market fit

Day 2 | Wednesday, Aug 16

  • Elena led the sBTC Signer user stories workshop

  • We held workshops on sBTC commit-reveal, signer, and coordinator — which resulted in a comprehensive design of the Signer architecture

  • More sessions on the Nakamoto and integration testing plans

💡 Day 3 | Thursday, Aug 17

  • We were able to use StackerDB to run a full DKG (distributed key generation) round. Kudos Joey!

    • The current code includes both ECDSA sign/verify of all DKG messages (to verify they came from the expected sources), and encrypt/decrypt of the DkgPrivateShares messages.

  • The Wasm team established the basic setup for testing and executing our compiled Wasm modules. Brice demoed a benchmark showing a >90x speedup over the existing runtime.

  • We completed an initial integration into Clarinet, to allow for simple testing in the clarinet test and clarinet console environments.

  • We clarified our release strategy for the Nakamoto & sBTC upgrades (details to follow in a later post).

Overall, the team left feeling energized with more clarity on the scope of deliverables for the upcoming releases. While the core engineering team was hacking on sBTC, the marketing team was busy hosting an sBTC competition of their own…

Ready Layer 2: Bitcoin Pitch Competition Recap

Ready Layer 2 is a Bitcoin pitch competition that offered $10,000 in prizes for the best ideas, prototypes, and plans for new sBTC-powered applications. Truly an exciting weekend, the event drew 360+ registrants, 100+ participants, and 24 completed submissions.

The winners: (drumroll please 🥁)

All projects that were submitted can be viewed using this link.

We couldn’t have done it without our fantastic partners. Huge shoutout to Hiro, Xverse and ALEX for their support of the event!

Highlights from Sprint 3

sBTC:

  • Commit-Reveal & Coordinator:

    • Enhanced coordinator scaffolding and revealer trait.

    • Managed stacks-core docs and updated sBTC contract names.

    • Prepared signer architecture docs for Hackathon.

    • Explored testing, commit-reveal updates, and sBTC development.

    • Started work on Stacks P2P layer implementation.

  • Cryptography:

    • Reviewed and finalized various PRs for Signer trait, taproot, and DKG.

    • Collaborated on schnorr signatures and BTC transaction formats.

    • Worked on approve/deny flow with nonces and exposing schnorr signatures.

    • Full DKG running on top of StackerDB!

  • sBTC SDK:

    • Completed length-prefixed contract names for sBTC deposit parsing.

    • Ensured SIP-005 compliant principal encoding and outlined future steps.

    • Planned next steps for stacks-core and sbtc-core .

  • sBTC UX/UI:

    • sBTC bridge deployment planning.

    • Continuing refactoring of sbtc-bridge-lib.

    • Xverse bridge integration.

    • Finished Xverse PR.

    • Started work on signer dashboard.

    • Designed sBTC Dashboard.

    • sBTC Bridge Settings page design.

  • Clarity:

    • Enhanced test coverage for sBTC Minting contract.

    • Developed unit tests and Clarity Trait for sBTC.

    • Actively progressing on sBTC Clarity trait contract and security exploration.

    • Engaged in PR reviews, Clarity libraries, and contract fixes.

  • Signer:

    • Brainstormed Signer docs/implementations.

    • Created tickets and discussions related to signer schema and withdrawal mapping.

    • Continued documentation and signer scaffolding work.

    • Reviewed developer release smart contracts.

    • Working on stubbing out signer architecture.

  • Product & Project Mgmt:

    • Planned and hosted a hackathon.

    • Workshopped launch planning, scope decision, and migration plan.

    • Workshopped sBTC user stories and product-market fit.

    • Contributed to Explorer integration, partnerships, and documentation.

Nakamoto:

  • Shipped StackerDB!

  • Producer Architecture

  • Wire format parsing for producer candidacy operation

  • Nakamoto block producer bitcoin operations

  • Block Producer RPC Endpoints

  • Integration: Block Producer Binary

ClarityVM:

  • Defined stack memory model in Wasm runtime.

  • Implemented clar2wasm compiler operations.

  • Reviewed design concerns and rebased with improvements.

  • Worked on var operations and clar2wasm implementation.

Around the ecosystem

Signing off,

Andre


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#16

This Week’s News & Stories - Fri, 08 Sep 2023

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Gm Bitcoiners,

Bitcoin Summer is coming to an end and sBTC builders are in the arena. This summer, the sBTC working group has made considerable progress streamlining the roadmap and core milestones. As always, Bitcoin Writes is the go-to place for the latest updates on sBTC development.

sBTC - bringing Bitcoin onchain

👉 What’s New? The current priority for the working group is deploying sBTC on the Stacks testnet to test deposits and withdrawals. This upcoming release milestone is built for Bitcoin Builders - to focus on capturing early feedback and improving the developer experience.

👉 Why does it matter? It’s 2023 and the majority of Bitcoin activity still happens on centralized services. The opportunity is wide open to deliver a superior platform for trading, lending and borrowing Bitcoin in a decentralized way. This release is a big step toward that.

Nakamoto - new and improved

👉 What’s New? A proposal called Nakamoto v1 has been published, which describes changes to the Stacks blockchain that include:

  1. Fast Blocks: Transactions mined and confirmed within seconds instead of minutes, achieved by increasing block production speed.

  2. Bitcoin Finality: Once a transaction is confirmed, reversing it becomes as difficult as reversing a Bitcoin transaction, eliminating forks in the Stacks blockchain.

  3. Bitcoin Fork Resistance: Stacks transactions valid after a Bitcoin fork will be re-mined in the same order, while invalid transactions will be dropped. (This feature is not consensus-critical and could be added in future releases.)

  4. No Bitcoin Miner MEV: Bitcoin miners will not have an advantage over Stacks miners, requiring competitive BTC spending to earn STX.

👉 Why does it matter? This proposal, if implemented in its current form, would significantly reduce the estimated time to implement Nakamoto, potentially allowing us to ship sBTC faster 🚀

We’ll be sharing more details on the upcoming milestones and roadmap over the next few weeks — stay tuned.

Nakamoto:

  • Completed Mockamoto Node & RPC endpoints

  • Enhanced StackerDB (load from smart contract, full ECDSA signing, event observer, RPC interface)

  • Progress on Stacks Signer (libsigner)

  • Worked on Epoch 3.0

sBTC:

Clarity:

Clarity Wasm:

  • Summit ported to stacks-blockchain

  • Built all functions necessary to support boot contracts

  • Tested execution of complex Clarity contracts in Clarinet and stacks-node

Quality of Life:

  • Progress on stacks-e2e-testing

  • Developed Clarity contract property testing plan

  • Created Rust orchestrator design document

  • Focused on DevnetJS and bitcoind debugging

  • Implemented mutation testing

Signing Off,

Andre


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#17

This Week’s News & Stories - Fri, 22 Sep 2023

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Dear Bitcoiners,

Can you feel it? The sentiment around Bitcoin is shifting. The confluence of institutional interest, regulatory clarity and developer resurgence has created tailwinds as we head into year end.

Given this, I believe now is the best time to be building in the Bitcoin ecosystem. Bitcoin L2s like Stacks can offer more flexibility for developers. When the Nakamoto upgrade goes live, it will significantly improve the speed and security of the network while providing the ability to transact BTC natively onchain.

I was recently asked “why does sBTC matter?” — this is a good question that’s worth reflecting on. Here’s my take:

Bitcoin is permissionless finance. It's an opportunity to democratize access to basic financial services. The problem is, when Bitcoin grows in popularity, network fees increase that can make the network prohibitively expensive except for whales and institutions. Bitcoin L2s ensure that everyone can transact on the world’s most secure network.

Bitcoin is the ability to opt out of a wildly unpredictable monetary policy and opt in to one that is reliable and stable. It is the best form of money available and sBTC provides new ways to be able to use and interact with it.

sBTC is needed to actually see a Bitcoin economy develop, where BTC is not just sitting idle but actually serving an important utility for businesses and users alike.

Why do you think sBTC is important? I’d love to hear from you.

- Andre

🔊 Call for sBTC Testers

The Stacks ecosystem is gearing up for the sBTC Developer Release, allowing select developers to build and test with an early version of sBTC. $50,000 in prizes are available for users to get involved. Sign up here.

✍️ New and Noteworthy: Stacks Thesis

Paul Veradittakit, Partner at Pantera Capital, published a Stacks thesis. This thorough report goes into the importance of Bitcoin scalability, the role of sBTC & the Nakamoto upgrade, and a deep-dive into the use cases and ecosystem.

Read the full post here

💡 Tweet of the Week

Marvin Janssen is a core protocol developer in the sBTC working group. He published a tweet thread highlighting the great work being done to deliver sBTC.

The original "sBTC Mini" protocol will not see an official testnet launch, as the sBTC work groups shifted gears. Nonetheless, I wanted to highlight some achievements and novel work done by the #Clarity WG composed of @FriendsFerdina1, Friedger, Jesus, Jose, and myself. 1/

— marvin.btc (@MarvinJanssen)
Sep 22, 2023


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#18

This Week’s News & Stories - Fri, 20 Oct 2023

View this on bitcoinwrites.com and subscribe to receive updates via email.

Gm Bitcoiners,

Hello from London! This week, I’m excited to share that the sBTC Developer Release has been deployed on Stacks devnet. This week’s issue will go over the main things you need to know to get up to speed on this milestone.

💻 What is the sBTC Developer Release?

The sBTC Developer Release is a minimum-viable testnet deployment of sBTC. It will allow the sBTC working group to test deposits and withdrawals, without the complexity of a decentralized set of signers. Instead, this release uses a central coordinator, which has two primary functions: (1) mint and burn sBTC (2) fulfill peg-out requests.

👩‍💻 Who is this release for?

As its named, this release is primarily for Bitcoin developers to begin building applications that will utilize sBTC. Over the past few weeks, the testing group has onboarded 150 qualified developers for the testing program. We’re seeking contributors to help catch bugs and provide invaluable feedback to the working group.

🔎 What is included in this release?

  • End-to-end deposit and withdrawal flows

  • SDK and CLI to interact with the protocol

  • Bridge API and Web Application

To get started, here is a tutorial of a demo application that uses the Bridge API. Kudos to Kenny Rogers for creating this overview guide! For more detailed documentation, check out this developer guide.

-Andre

Tweets of the Week

Copper becomes the first major custodian and digital asset infrastructure provider to signal their intent to support the expected Nakamoto and sBTC upgrades. Their announcement is a must-read for any Bitcoin builder (especially those of you keen on sBTC) and covers their integration with the Stacks, bringing Stacking, custody, and SIP-010 support to the network.

We’re thrilled to announce our integration with @Stacks – the leading Bitcoin layer for dApps and smart contracts.

This integration allows institutional clients to safely custody, trade, and leverage Stacking with all existing and future SIP-010 tokens on the Stacks blockchain.… twitter.com/i/web/status/1…

— Copper.co (@CopperHQ)
Oct 18, 2023

(Shameless plug) The Bitcoin Layer 2 thesis is gaining speed. This is one of the most exciting things to be working on in the industry and I’ve summarized a few of my thoughts on the opportunity below.

The Bitcoin Layer 2 Thesis

1. Bitcoin is the most reliable, secure foundation to build decentralized applications. At $500B market cap, it is also a large and mostly untapped market.

2. Institutional adoption will result in significant capital inflows to BTC. As Bitcoin ETFs… twitter.com/i/web/status/1…

— andre.btc (@andrerserrano)
Oct 11, 2023

The BitVM whitepaper got a lot of coverage last week and it has the potential to bring more expressivity to Bitcoin. Check out this take from Muneeb on how it impacts Stacks. (Hint: it’s a good thing)

How does BitVM impact Stacks? BitVM can contribute to growing the market size of Bitcoin DeFi and apps. We're not in a zero-sum game but a positive-sum game. Ethereum L2s are already a $50-$60B market, whereas Bitcoin L2s and related projects are barely a $1-$2B market (depending… twitter.com/i/web/status/1…

— muneeb.btc (@muneeb)
Oct 13, 2023

Bitcoin Unleashed London - Day 2

Day 2 of Bitcoin Unleashed is here. Doors open at 9am and programming will run from 10am - 2:30pm. For those not able to attend in person, check out the full livestream.

If you see me around, be sure to let me know what you would like to see built on sBTC 💪


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#19

This Week’s News & Stories - Mon, 06 Nov 2023

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Dear Bitcoiners,

Before we dive in, I’m happy to share that all of the sBTC talks from Bitcoin Unleashed are now live! You can check them out in the link below.

In this discussion, I sit down with sBTC core developers and gigabrains Jude Nelson, Mike Cohen, Friedger Müffke and Will Corcoran to discuss building sBTC-powered applications. Now, on to this week’s main updates.

🚀 Hermetica launches Bitcoin yield vault powered by sBTC

The first app to launch on the sBTC testnet is now live! Hermetica uses automated derivative strategies to generate a Bitcoin yield. The strategy has been back tested over the past six years and generates an average 6.5% APY. Check out the Hermetica Earn Vault.

This is a huge milestone for sBTC, which is now one step closer to delivering on its vision to make Bitcoin a productive asset. The sBTC testnet was released only two weeks ago and we are thrilled to see Hermetica become the first to integrate it into their application.

sBTC Design Sessions

Since the launch of the sBTC developer release, the working group has been focused on its next milestone: Mainnet. The sBTC working group been hosting daily SIP review calls, which have significantly simplified the design and uncovered some key new features. Summaries of all the key decisions can be found on Github.

⚙️ sBTC will support the OP_DROP transaction format (Github)

sBTC deposit transactions are initiated on Bitcoin with a special data field that includes the account address to which sBTC is minted. The working group has decided to use the OP_DROP format for this transaction, which affords a few key benefits:

  1. OP_DROP lowers sBTC integration efforts. It allows users to peg in BTC from any Bitcoin wallet, custodian, or exchange. By enabling deposits from custodians, this also simplifies the process for institutions, which have strict internal policies for which wallets they can use.

  2. OP_DROP allows for superior UX. Stacks apps can now abstract sBTC peg-in operations away, enabling users to interact with apps directly with native BTC.

Since this format uses two transactions to fulfill a sBTC operation, we call it the commit-reveal scheme. Documentation can be found here.

Check out this tweet thread for more detail, courtesy of Tycho from Zest Protocol.

1/ Many asked for an sBTC OP_DROP deep-dive, here we go 🧵

— tycho.btc (@TychoOnnasch)
Oct 31, 2023

🛡️ sBTC will not launch with a cap on the total supply (Github)

When the sBTC whitepaper was first released, it included a maximum amount of BTC that can be deposited. This was known as the liveness ratio, calculated by the total amount of STX locked in consensus.

The response from the community has been that this feature could inhibit adoption of the protocol due to its scalability limitations. By removing the hard cap, the working group is favoring a design where >30% of the signers are reputable and professional entities, which provide an additional backstop to secure the BTC threshold wallet.

Importantly, this decision ensures the sBTC protocol can scale to meet the demands of users today. Our strategy is to deliver the best practical system in the near-term while also ensuring the protocol can upgrade to meet the evolving needs over time. Long-term, the working group is doing active research and development on new technologies that could reduce the trust assumptions of the peg, such as BitVM or Discreet Log Contracts.

🎉 Mockamoto PR has merged! (Github)

This milestone brings the Nakamoto node online. Mockamoto is the first major milestone to launch Nakamoto on Mainnet. It supports the following functionality:

  • There is a single miner, and no stacker. It produces one block about once every five seconds.

  • It runs against a Bitcoin regtest node, which produces Bitcoin blocks once every 60 seconds.

With this update, we are one step closer to sBTC. The working group plans to provide more detail on the roadmap and implementation for Nakamoto and sBTC in the upcoming weeks.

Signing Off,

Andre


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#20

This Week’s News & Stories - Mon, 04 Dec 2023

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As Bitcoin transaction costs continue to rise and its secure yet limiting scripting language hinders app builders from creating fully expressive smart contracts, there is a pressing need for a secure, scalable, and user-friendly Bitcoin layer. One intriguing development is the expected use of OP_DROP in the context of BTC deposit transactions on the Stacks layer for Bitcoin. In this article, we'll delve into the mechanics and advantages of OP_DROP as the ecosystem looks to further develop its Bitcoin L2 with sBTC.

Understanding sBTC

Bitcoin L2s aim to activate the Bitcoin economy by making BTC deployable in smart contracts on a scalable and user-friendly Bitcoin layer. sBTC, a 1:1 Bitcoin-backed asset, will address the main bottleneck to unlocking this BTC capital: A decentralized way to move BTC from Bitcoin L1 to and L2 and back. In more technical terms, sBTC serves as a decentralized BTC ‘peg’ on the Stacks Bitcoin Layer, secured by Stacks’ consensus. The process of moving BTC to sBTC is generally referred to as a ‘deposit’ (and out as a ‘withdrawal’), but you may also see the terms ‘peg-in’ and ‘peg-out’ and occasionally even ‘mint’ and ‘burn’ depending on a particular person’s preference, but they all describe the same action. Read more about sBTC here.

OP_DROP Mechanism

You can see how important deposit operations are to sBTC and therefore to the layer overall, so it follows that how those transactions get done is also extremely important.

Enter, OP_DROP.

OP_DROP is a mechanism used to format a deposit transaction. OP_DROP plays a crucial role in encoding the sBTC destination address into the Bitcoin L1 address used for depositing BTC.

What sets this system apart is the ability to deposit BTC to sBTC directly to a Stacks address via a single Bitcoin L1 transaction. OP_DROP works by sending BTC to a slightly modified Bitcoin address that contains the Stacks address to which sBTC should be minted. OP_DROP also enables users to deposit BTC to sBTC from any wallet, exchange, or custodian using a user interface connected to a Stacks address. In contrast to OP_RETURN, this user-friendly approach allows users to deposit via a single transaction.

This is a big step up from OP_RETURN systems that require a second output to be generated, which is both a larger task for exchanges and requires specialized wallet software with knowledge of how the deposit/withdrawal system works, limiting growth.

With OP_DROP, users can deposit their BTC into sBTC with a single, standard Bitcoin transaction.

Use Case: Zest Protocol

Consider a user who wants to earn yield on their BTC through Decentralized Finance protocol Zest. By sending BTC on Bitcoin L1 to a Zest Protocol yield pool, sBTC enters the Zest Protocol yield pool on the Stacks L2. In the same block, Zest Protocol mints a receipt token to the user.

This new mechanism without a second output represents a significant leap forward with multiple benefits for users and entities aiming to leverage Bitcoin layer Stacks.

Broader Accessibility

Building a second output is a tough ask to a custodian (like Coinbase) to do just to support sBTC deposits. With OP_DROP, a user can generate a deposit address and send BTC there from Coinbase. This wouldn’t work with OP_RETURN, since Coinbase would have to build the second output in the transaction with an added Stacks address.

Cost Efficiency and User Experience

This approach not only enhances user experience by simplifying the process but is also tax-efficient. Unlike in many jurisdictions where wrapping tokens can trigger taxable events, users in this system do not need to hold sBTC.

OP_DROP on the Stacks Layer

As of now, Stacks is the only layer capable of leveraging OP_DROP deposits. This is because Stacks has in-depth and detailed read access to Bitcoin state, while ensuring that Stacks nodes are in sync with Bitcoin state. As a result, a Stacks smart contract can detect whether BTC has been deposited using the OP_DROP format. While other layers can read the state of the Bitcoin chain, they don’t have the same low-level script interpretation necessary to parse the data out of an OP_DROP transaction directly in their smart contract code.

In summary, the use of OP_DROP in BTC deposits on the Stacks layer introduces efficiency, flexibility, and tax benefits for users. As this technology continues to develop, it will be interesting to see how it shapes the broader landscape of decentralized finance on Bitcoin.


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#21

This Week’s News & Stories - Wed, 06 Dec 2023

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Dear Figment, welcome to the Stacking party.

Figment is one of the leading providers for blockchain infrastructure, partnering with the industry’s top exchanges, custodians, wallets and asset managers. Today, I’m excited to share that Figment will support the Stacks layer with an institutional ‘Stacking’ solution and start rolling out service to their network of 250+ clients.

Figment brings deep expertise in security and industry best practices. They have become a hands-on contributor, supporting the Stacks network with the rollout of the expected Nakamoto and sBTC upgrades. This post will break down what this means and why it matters.

Unleashing the Potential of Bitcoin on the Stacks layer

We’re at the forefront of a Bitcoin renaissance that will usher in new opportunities to make BTC a productive asset. sBTC will enable fast, low-cost transfers of BTC on Layer 2, and more expressive applications that will unlock new use cases for Bitcoin. Building a robust validator network is a top priority that will help ensure the network is secure and decentralized. This is an important step toward that goal and we are glad Figment has decided to join us on the frontier.

Figment’s Strategic Role as a Signer on the Nakamoto Upgrade

Importantly, Figment announced they will become a Signer for the upcoming Stacks Nakamoto upgrade, helping Stacks take another step forward as a complete Bitcoin L2. Stacks Signers will have a key role: To validate (or ‘sign’) Stacks blocks and process sBTC transactions, ensuring seamless movement of BTC between Layer 1 and Layer 2. Through this integration, Figment is helping to secure the network and enable the next generation of scalable Bitcoin applications.

A Unique Offering for Bitcoin Staking

There is a huge untapped opportunity for Bitcoin staking. Stacks is the only layer that is able to offer a native Bitcoin yield, which it achieves through its novel Proof-of-Transfer (PoX) consensus mechanism. This mechanism is how Stacks achieves Bitcoin’s reorg resistance, inheriting the essential security properties that make Bitcoin the world’s most trusted network. Figment is positioning itself as an early mover in this sector and is exploring novel products that it could enable.

Bringing Institutional-Grade Services to Stacks

Figment's involvement brings institutional-grade infrastructure and services to the Stacks ecosystem. Their expertise provides a solid foundation for institutions looking to explore and capitalize on the opportunities in the Bitcoin DeFi space. With Figment's support, these institutions can confidently participate in Stacks, knowing they have a reliable and experienced stacking partner onhand.

How Does This Affect Builders?

  • White Label Services: Figment’s White Label services allow builders to integrate stacking directly into their applications without the additional overhead of running a Signer node.

  • Easy Integration: Figment offers flexible APIs that allow app developers the ability to manage their token operations in a seamless way.

  • Security & Performance: Figment’s infrastructure is optimized for security and resilience of staked assets, while providing high uptime for their services.

Concluding Thoughts

The sBTC working group is excited to work closely with Figment over the next few months rolling this out. They have become an active participant on the Stacks network and share a deep understanding of the Bitcoin L2 vision.

If you are interested in supporting institutional stacking services within your business or application, please get in touch.


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#22

This Week’s News & Stories - Mon, 11 Dec 2023

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Unlike other BTC bridges, sBTC is not supported by a central custodian or a federation: instead, sBTC is secured by an open network of signers, making sBTC the most decentralized, Bitcoin-backed asset.

In this article, we’ll cover the fundamentals of the sBTC security model, the role of sBTC Signers, and how the sBTC working group is enabling a more scalable sBTC protocol design.

A Bitcoin-Backed Asset Worthy of Bitcoin

sBTC embraces the core principles of Bitcoin: decentralization, permissionless, and trust-minimization. The system is:

  • Open Membership: sBTC operates as an open network, where anyone can become a validator, increasing the decentralization and inclusivity within the sBTC ecosystem. In contrast, other alternatives have closed groups of signers.

  • Decentralized: The software libraries for sBTC can support over 150 validators, surpassing the limitations of current multi-sig implementations. This allows for a broader and more diverse set of participants, further strengthening decentralization.

  • Trust-Minimized: sBTC provides users and developers with a trust-minimized option—you interact with a decentralized network instead of a central custodian or small group of signers, aligning with the core principles of Bitcoin.

  • Collateral-Backed: Unlike alternative multi-sig approaches, which have zero collateral backing their respective Bitcoin pegs, sBTC has $250M+ of collateral in STX tokens deposited in the protocol, providing a substantial incentive to maintain the peg.

Who Are the Signers?

The sBTC asset is supported by this network of “validators.” There can be up to 150 of them, and anyone can join/leave the signer network as they desire. We expect these validators will be a combination of:

  • Trusted institutions (including exchanges and custodians, such as Figment and Copper)

  • Stacking pools (such as Xverse)

  • Individual node operators

These signers lock up Stacks tokens (STX) in order to be a signer on the network, and for their work to maintain the sBTC peg, validators earn BTC rewards, making honest behavior the most profitable course of action.

Greater than 70% of these signers are required to approve deposit and withdrawals from the system. This means that as long as at least 30% of validators are honest, the BTC deposited in sBTC is secure. To steal the BTC deposits, malicious actors would need to convince a number of validators that represent > 70% of the stacked STX capital to collude in order to steal the BTC funds. This is highly unlikely in practice given Stacks validators are geographically dispersed entities with significant business risk for behaving maliciously.

For more technical details on the implementation and design of sBTC, please refer to the SIP025. The SIP is currently under community review, pending approval on a future date to be announced.

Inheriting Bitcoin’s Security

sBTC has a number of traits that make it more secure than other Bitcoin-backed assets.

sBTC has read access to Bitcoin.

Because Stacks smart contracts have read access to Bitcoin, users can send simple Bitcoin L1 transactions to interact with Stacks and deposit BTC for sBTC. In contrast, moving BTC to a chain that is not designed to work with BTC, like Solana or Ethereum, do not have this read access, which brings different security assumptions.

Stacks forks with Bitcoin.

A lot of complexity is introduced to Bitcoin-backed projects on other chains, given that Bitcoin and the other L1 are independent of each other. When Bitcoin forks, the other chain won’t care, and each fork can destabilize the peg as large numbers of transactions can be forced to roll back after the fact.

Unlike those projects, Stacks auto-follows all Bitcoin forks and derives its security from Bitcoin. There is no risk of the sBTC peg being deprecated by a Bitcoin fork because the entire Stacks blockchain will reorg alongside Bitcoin, bringing the peg back into alignment with Bitcoin.

sBTC is reorg-resistant.

Taking this one step further, the security properties of a Stacks transaction are the same as doing a Bitcoin transaction. As soon as a Bitcoin block arrives, Stacks transactions start getting Bitcoin finality. This is not possible with other systems. In other words, Stacks does not have a separate security budget. The security level of a Bitcoin L1 transaction in a Bitcoin block is the same as a Stacks transaction that gets packaged into that Bitcoin block.

FAQ

Does sBTC have a hard cap/liveness ratio?


The original white paper proposed a liveness ratio, essentially a cap on the amount of sBTC that can be minted based on the value of STX locked into the protocol. This concept came from a security model of economic incentives, in which stackers have full signing control over a Bitcoin wallet containing the locked BTC. In the original white paper this was set to 60% of locked STX (i.e. if there is $200M of STX locked, the system capacity is $120M of BTC).

However, after further research and consideration, the sBTC working group concluded that such a cap would significantly limit potential DeFi usage and discourage large players from entering the system. Given these findings and market realities, the sBTC design no longer has this liveness ratio, and instead relies on the trust-assumption of honest institutional validators as the final security backstop.

The research concluded that a hybrid system that has both (a) anonymous signers with locked STX and (b) known, institutional signers that collectively hold > 30% locked STX, is arguably more secure than a system with just anonymous signers with locked capital. This is because institutional participants have significant incentives to behave honestly and thus bolster the organic economic incentives of the system.

For more information on this topic, see these resources:

What happens if the value of STX drops in relation to Bitcoin’s price?

Even if the price drops, validators will still have STX locked in the protocol, offering economic incentive to behave rationally (and remember, validators are also incentivized to behave honestly through the BTC rewards earned by their work to process deposits and withdrawals.)

With a combination of institutions, pools, and individuals, the design offers enough flexibility that we believe that at least 30% of signers will remain honest regardless of the price. The decision to utilize a combination of both economic and reputational incentives supports this assumption because institutions are likely to continue normal Signing operations, even if the collateral backing the system declines relative to BTC.

What is the purpose of the STX token?

The STX asset has two main uses: (a) mining incentives i.e., to keep the mining system open and decentralized; and (b) STX is the capital locked up in consensus that provides economic security to users who mint sBTC. STX will collateralize the sBTC system, offering greater levels security than systems that don’t post any collateral.

Concluding Thoughts

sBTC is a protocol that will enable users to put their Bitcoin to work in a secure and decentralized way. It enables permissionless movement of BTC onto the Stacks Layer through its open network of Signers who validate deposit and withdrawals transactions.

The current designs ensure that sBTC remains a collateralized system that also benefits from a high-reputation, institutional Signer network. Importantly, this enables sBTC to scale to meet the growing demand for Bitcoin L2s in the short-term. The sBTC working group is also committed to long-term research and development of new technologies that will allow us to continue to reduce the trust assumptions of the protocol.


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#23

This Week’s News & Stories - Fri, 15 Dec 2023

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Dear Bitcoiners,

The energy in the Stacks community is electric. The sBTC and Nakamoto working groups have been putting in overtime to close out key milestones. There are new apps on the horizon and investors are taking notice. Meanwhile, the business development working group notched some wins of their own.

With everything going on in the Stacks ecosystem, it can be a lot to keep track of. I break down the latest so you can stay up to speed on the leading Bitcoin L2.

-Andre

💻 Nakamoto Milestone v0.2 is code complete

👉 What this means: this milestone achieves a controlled testnet for Nakamoto, an important step on the Road to Mainnet. The working group is currently integrating this with the new ClarityWASM virtual machine, which will bring additional improvements to the network.

We’ve now started on the next milestone v0.3 to integrate the full DKG (distributed key generation), which will enable multiple signers on the network. By this milestone, most of the Nakamoto functionality will be complete. Special shout out to all the core engineers who made this happen!

👉 TLDR: Nakamoto is on track 🚀

⛓️ Pyth Price Feeds Launch on Stacks

Builders rejoice! Stacks developers can now integrate their applications with 400+ real-time price feeds from the Pyth network. I’m excited to see what developers build using these new tools. Read the full announcement to get started.

📝 Figment announces plans to become Signer on Nakamoto

In recent news, Figment announced support for the Stacks Nakamoto upgrade. This will enable Stacking in their network of 250+ institutional clients.

Through this integration, Figment is helping to secure the network and enable the next generation of Bitcoin applications. Read more about the partnership here.

📈 Investor perspectives

🎅 Happy Stacksmas to all, and to all sovereign rights!

Finally, be sure to check out the recording from this year’s Stackies ceremony. It was great to see so many community contributors recognized for their work throughout the year. Also, Kyle gave a dramatic reading of this year’s Stacksmas poem that you do not want to miss.

Based on this meme, it appears Setseuz celebrated his “Best Builder” award for approximately sixty seconds before returning to Nakamoto 😂

Can’t believe I get to work on Bitcoin & Stacks all day :)

Life’s insanely neat - back to it y’all, we have a bull market to catch 🦾

— Setzeus (e/acc) 🇺🇸 (@setzeus)
Dec 14, 2023


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#24

This Week’s News & Stories - Fri, 22 Dec 2023

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Gm,

This past week has been one of the most fun in recent memory. Bitcoin builders are fully in control as we head into 2024. There’s been a lot happening in the Stacks ecosystem, so let’s dive in.

🤯 STX20 Protocol: Innovating Inscriptions on Stacks

What is it?: The STX20 protocol is a community-led initiative to create digital artifacts on Stacks. Inspired by BRC20s, the protocol works by embedding information in the memo field of a Stacks transaction. The protocol is fair mint, meaning anyone is able to deploy new inscriptions. The first official token launched was STXS, which minted out its 21M supply limit in just under a couple hours.

Why it matters: STX20s are driving meaningful new activity on the Stacks network. What started as a group chat with a few degens, resulted in 120,000+ transactions with average daily transactions up over 700% month over month. Despite some minor congestion around the launch, the Stacks network handled the increased traffic with ease, thanks to the work of Stacks core engineers to optimize the mempool.

How builders responded:

Concluding thoughts: Degens are going to degen

STX20 tokens are objectively hilarious — not only for the memes, but because Stacks already has a fungible token standard called SIP10. While some may dismiss this on the surface, it simply shows that degens are going to degen. I certainly won’t be fading this new protocol. And in case you were wondering, yes, STX20s will trade against sBTC in the future.

💸 StackingDAO launches on Mainnet

Congratulations to the StackingDAO team on their mainnet launch.

StackingDAO is a new liquid stacking protocol on Stacks. It combines the benefits of earning native BTC rewards with the flexibility to deploy STX in DeFi and Web3 protocols.

The work to bring this functionality to the Stacks ecosystem started in May 2023 with a Stacks critical bounty. The initial goal was to “provide a streamlined stacking process for users and offer rewards for securing the network while maintaining liquidity.”

This is a big achievement for the ecosystem:

  • It unlocks $500M of STX capital which can be used in DeFi and other use cases.

  • Stacks holders can continue to earn yield, without waiting two weeks to unlock their STX (the duration of a Proof-of-Transfer cycle).

  • After the Nakamoto upgrade, Stacking providers will be required to run a Signer node in order to receive protocol rewards. This means that StackingDAO could become a preferred solution given the easy user experience.

Liquid Staking is now a $20bn+ industry with clear demand in other ecosystems. Importantly, if StackingDAO is successful, they could become one of the larger signers for sBTC, contributing to the decentralization of the protocol. I’m thrilled that this capability is live on Stacks and look forward to the ecosystem extending support for stSTX.

🌐 Tim Draper is “pretty excited” about Stacks.

In case you missed it, legendary investor Tim Draper is “pretty excited” about Stacks. He compared Stacks and applications built on Bitcoin to what Microsoft enabled during the internet boom. Welcome to the community, Tim.

🌍 Around the Ecosystem:

"sBTC represents a fundamental piece of infrastructure for developing scalable, native DeFi on Bitcoin. sBTC is vital to Velar's roadmap, particularly for Velar V2 Artha, where sBTC acts as collateral. This enables a historic first: using Bitcoin holdings as collateral for leveraged trading of tokens on native Bitcoin DeFi."

Mithil Thakore — CEO, Velar

Finally, this will be the last issue of 2023. I am looking forward to Season 2 of Bitcoin Writes starting in January. I hope you all have a wonderful holiday and look forward to building on all of this momentum in 2024.

-Andre


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#25
#26

This Week’s News & Stories - Mon, 01 Apr 2024

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Dear Bitcoiners,

2024 has been off to an electric start. With Bitcoin Spring fast approaching, seeds that were planted during the bear market are beginning to bear fruit and we are starting to see the flowers bloom.

This newsletter breaks down the most important updates across the Stacks ecosystem and why they matter. There’s a lot happening, so let’s dive in.

🔥 Nakamoto Public Testnet is Live

The Nakamoto public testnet was a major milestone achieved on March 25th, 2024. This release enables developers and Signers to test Stacks block production before mainnet activation.

The Nakamoto upgrade includes changes Stacks consensus, requiring Stackers to run validator nodes to confirm new Stacks blocks. This is an essential part of the system’s liveness and we are already seeing signers join the testnet.

What’s next: The Nakamoto upgrade will be rolled out in phases with a series of planned releases over the next two months. The chart below provides a summary of what users can expect in each upgrade.

Upcoming Milestones:

  1. Mainnet Instantiation: April 15-29

    • The PoX-4 contract is shipped while the Nakamoto rules remain inactive. This phase allows signers to register on mainnet without contributing to Consensus.

  2. Mainnet Activation: May 15-29

    • The Nakamoto rules activate enabling the full set of Nakamoto features including Signer-based functions, fast blocks, and Bitcoin finality.

Takeaway: The Nakamoto upgrade is fast approaching and core developers across the ecosystem are working to ensure a timely and secure rollout.

✍️ The Stacks Ecosystem Welcomed 8+ New Signers

Signers have a strategic role in the Stacks ecosystem, validating Stacks blocks and in the future, processing sBTC deposits and withdrawals.

In Q1, we were thrilled to offer a best-in-class group of Signers to the network. This included both institutional and indie validators alike. These Signers joined an exceptional group that includes Figment, Xverse, Ryder and others that are preparing for launch. Read more on this latest Signer cohort here.

Why it matters: Stacks aims to have the largest validator set of any Bitcoin L2, ensuring that Stacks remains the most decentralized layer to build Bitcoin applications.

🔐 BitVM Offers Huge Potential for Bitcoin Layers

BitVM was introduced in late 2023 by Robin Linus. It offers major potential improvements to BTC bridge and sidechain designs, bringing greater expressivity to Bitcoin without requiring changes to Bitcoin’s consensus.

The Stacks ecosystem has formed a new BitVM Working Group and is expected to invest more than $2 million on BitVM research and development over the next 12-18 months. For further reading, Hiro does a great job breaking down the impact of BitVM on Stacks and sBTC.

TLDR: BitVM changes the trust assumptions from an M-of-N honest majority to a 1-of-N security model, requiring only one honest participant. This enables optimistic-bridging functionality on Bitcoin. Combined with certain covenants, BitVM could significantly improve trust-minimized BTC bridge designs.

It’s worth noting that BitVM is still early in its development and the first BitVM bridges aren’t expected until 2025. Despite this, it is clear that BitVM has catalyzed a new wave of interest in Bitcoin development and it’s thrilling to see the evolution of this technology.

Takeaway: We want to ensure that sBTC remains at the cutting edge of trust-minimized bridge designs and can evolve as new technological breakthroughs emerge in the future. For now, BitVM doesn’t impact the sBTC rollout strategy, which is projected to be released a few months after Nakamoto. The sBTC Working Group will share more details on the sBTC roadmap in the upcoming weeks.

🧱 Liquid Stacking Emerged As a Powerful New DeFi Primitive with $100M+ TVL

Liquid Stacking is emerging as a critical building block of Bitcoin DeFi.

It allows users to earn native yield through Stacking while allocating their assets to other DeFi protocols. Since its launch, Stacking DAO has seen impressive growth — it recently surpassed $100M Total Value Locked. This provides greater liquidity for projects like Bitflow, Zest, and Arkadiko which have been quickly launched new products using stSTX.

What’s next? I expect the Liquid Stacking wars to heat up in the coming months. LISA, a project by ALEX, has already partnered with Ryder and Xverse to grow their liquid stacking commitments. Also, Papaya has taken a novel approach that will also include staking for sBTC. It’s worth closely watching this space to see how these projects develop.

🏆 Ecosystem Wins

Concluding Thoughts

I would be remiss not to include mention of the first spot Bitcoin ETF approval in the US. This milestone established Bitcoin as a mainstream asset, with institutions such as BlackRock, Fidelity, Bitwise and Ark among issuers that have received over $11 billion in net inflows since January 11th.

That’s good news for Bitcoin layers like Stacks. More institutional demand for Bitcoin will ultimately find its way into startups and protocols throughout the Bitcoin ecosystem. As a result, Stacks is well positioned to capture this demand, ushering in new ways to make Bitcoin a productive asset.

This year is off to a great start. We’ve got a lot of work ahead and several tailwinds at our backs. If you’re looking for a signal to start building on Bitcoin, now is the time.

Andre


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#27

This Week’s News & Stories - Tue, 30 Apr 2024

View this on bitcoinwrites.com and subscribe to receive updates via email.

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sBTC Rollout: Overview

sBTC enables secure movement of BTC onto the Stacks L2 in order to benefit from more scalable and expressive smart contracts. Today, the sBTC working group has released an update on the sBTC rollout plan that comes following an extensive scoping exercise.

TL;DR

The sBTC Release Candidate will be ready at the end of August. From there, core developers want to observe 3-4 weeks of stable Nakamoto behavior on mainnet, and then the release of sBTC can begin. Given the extra time between now and Nakamoto Activation that was added for Signer resiliency features, sBTC can now follow Nakamoto by roughly a month instead of two.

Bootstrapping Phase

Since the introduction of the initial sBTC design last year, the Working Group has been gathering extensive feedback from builders and experts inside and outside the ecosystem. This process has identified a path for rollout that includes two key phases:

  1. Bootstrapping: In this phase, an initial group of Signers selected by a community vote will be responsible for Signing sBTC transactions on the network.

  2. Signer Rotation: In this phase, the full design of the sBTC system with an open and decentralized Signer set is reached, increasing decentralization after the system is further tested in the bootstrapping phase.

Rollout Plan

The benefit of this initial bootstrapping phase is that sBTC can launch quickly and securely. This version does not require a hard fork to launch, which will help accelerate the timeline. This approach will allow builders to start gathering users and TVL, while also allowing as much time as needed to safely increase Signer decentralization.

The sBTC working group has projected the following launch milestones:

  • July 2024: Code complete

  • August 2024: sBTC mainnet release candidate ready

  • Nakamoto Activation: sBTC mainnet release follows +4 weeks

  • Q1 2025: sBTC Signer Rotation begins

Rollout Rationale

The rollout plan for sBTC takes over a year of research and learnings into account, with the key points being:

  1. sBTC must be safe at launch. Given the fact that Bitcoin is a pristine asset, there is no room for launching a production system that is experimental in nature. For sBTC, a controlled release that is more centralized initially is an industry best practice that will allow more time with the benefit of real-world usage and mainnet activity in hand to ensure the system is robust before further decentralizing the Signer set.

  2. Builders need sBTC ASAP to power Bitcoin applications. The sBTC Working Groups has received consistent feedback that builders would prefer a version of sBTC that can be released sooner rather than later. Starting with the bootstrapping phase allows sBTC to be released more quickly but still safely, allowing builders to begin using it, acquiring TVL, and building their user base while further upgrades and progressive decentralization of the Signer set can happen in the background.

Deep Dive: Bootstrapping Phase

The bootstrapping phase brings sBTC to the Stacks mainnet with a limited group of Signers. From a user and developer perspective, sBTC during this phase will not be vastly different from sBTC as articulated in the white paper.

There are, however, important difference and tradeoffs during this phase. Let’s first take a look at the high-level features.

Features:

  1. sBTC will be a SIP-10 token backed 1-1 by BTC in a peg wallet

  2. The sBTC wallet will be maintained and managed by a limited sBTC signer set that will persist throughout the bootstrapping phase

  3. BTC can be converted into sBTC within 3 Bitcoin blocks; and sBTC can be converted into BTC within 6 Bitcoin blocks

  4. The SIP-10 token contract stays the same, meaning no adjustment from builders will be needed as the system gets more decentralized in the Signer Rotation phase.

Differences in the Bootstrapping Phase:

Several changes are being implemented to enable sBTC to be launched earlier and with less risk:

  • sBTC Signers will be selected through a community voting process. The sBTC design implements a dynamically rotating signer set each Proof of Transfer cycle. However, in the bootstrapping phase, sBTC signers will be selected through a community voting process that will take into account Signer features and availability.

  • sBTC Signers are separate from Stacks Signers. In the final sBTC design, Stacks signers are required to become sBTC signers to fulfill sBTC deposit and withdrawal actions. The bootstrapping period uses a separate subset of Stacks signers to secure the BTC wallet and Signer operations are not explicitly linked with slashing of rewards.

  • sBTC deposits will be triggered via an API call. During the bootstrap phase sBTC deposits must be initiated via an API call to alert the signers to the presence of a Deposit. After the bootstrapping phase users will have the option to alert the Signers of a deposit via a Stacks contract call, but the API will remain as a fee-less option to communicate with the Signers.

Next steps

Since the sBTC whitepaper was released, we’ve set out to build a more decentralized and permissionless Bitcoin asset aligned with the ethos of the Bitcoin ecosystem. In addition, we want to ensure a safe launch with minimized downside, ensuring we treat Bitcoin as the premier asset it is. The bootstrapping phase outlined above enables all of this while accelerating the speed to market, helping Bitcoin builders in the process. The ecosystem and sBTC Working Group are committed to continued increases in decentralization as the system matures and invite you to follow progress on Github or by subscribing to this newsletter.

Bitcoin is more than people think and sBTC will soon prove that to the world!


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#28

This Week’s News & Stories - Mon, 15 Jul 2024

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Gm everyone,

Bitcoin summer is finally here. Don’t let the sideways market fool you - the “potential energy” stored in the Bitcoin ecosystem is positioning for explosive growth. The convergence of developer growth, technical innovation and regulatory tailwinds have laid the groundwork for a significant increase in adoption as we head into end of year.

Stacks is a key part of this, creating infrastructure to scale Bitcoin through layers. sBTC enables developers to build on Bitcoin and connect BTC to a growing network of decentralized applications. This newsletter breaks down everything you need to know happening across ecosystem.

Today's Issue 👇

  1. Stacks Receives No Action Letter from SEC

  2. Nakamoto 3.0 Is Code Complete

  3. Bitcoin Enters Mainstream Politics

  4. Register Today: Bitcoin Builders Conference

😤 Stacks Receives No Action Letter from SEC

Hiro, the company that builds developer tools for Bitcoin and Stacks, shared on X that it has received a No Action letter from the SEC. This concluded a three year investigation into the Stacks cryptocurrency in the best possible outcome for the company.

Stacks was the first company to “come in and register” with the SEC as part of its Reg A+ token offering in 2019. At the time, this decision demonstrated the project's focus on building long-term as well as its commitment to doing things the right way.

👉 Why it matters: Bitcoin's leading L2 is now cleared by US regulators. As institutional interest in the category continues to grow, this sets Stacks apart as one of the few tokens in the US that’s SEC compliant.

💬 The bottom line: With all the scrutiny the industry has faced over the years, hopefully this sets a precedent against regulatory overreach and signals that the tides may be beginning to turn.

💯 Nakamoto 3.0 Milestone Is Code Complete

On Friday, Stacks developers celebrated another major achievement: The Nakamoto 3.0 milestone is now code complete.

The Nakamoto upgrade will improve the speed and security of the Stacks network, with features designed to make it the best place to build Bitcoin applications. With this release, it also clears the way for sBTC to launch shortly thereafter.

In April, Stacks released phase one of the upgrade, Nakamoto 2.5, which activated the Stacks Signer network. As of today, there are 35 geographically distributed signer nodes on the network with 375M STX stacked (worth over $600M at today’s valuations!).

👉Why it matters: Nakamoto is a ecosystem-wide effort to provide the best user and developer experience on Bitcoin. This milestone brings us one step closer toward to the final release date later this quarter.

🇺🇸 Bitcoin Enters Mainstream Politics

Bitcoin is the separation of money and state. It is inherently apolitical; and while this blog is politically neutral, it’s worth acknowledging the way that Bitcoin has entered mainstream politics over the past few months.

Last week, the Republican Party released its official 2024 platform that included the following embrace of crypto:

It is incredible that this pro-crypto stance would be supported by a major political party in the United States — another sign that the regulatory landscape is changing.

I also want to definitively state that it’s unfortunate to see the country delving into political violence. We are better than that and I hope that we can come together as a nation following this weekend’s incident.

🧑‍💻 Bitcoin Builders Conference: Register Here

For everyone coming to Nashville, make sure to register for the Bitcoin Builders Conference! You’ll hear from leaders across the Bitcoin ecosystem from companies like Trust Machines, Bitcoin Frontier Fund, Spartan Group and more.

Yours truly will be there discussing sBTC, so if you are a founder looking to build on Bitcoin, I’d love to connect.

Until next time,

Andre


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#29

This Week’s News & Stories - Fri, 02 Aug 2024

View this on bitcoinwrites.com and subscribe to receive updates via email.

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The Stacks protocol provides a unique, compelling benefit found in few places in the crypto ecosystem — bitcoin rewards.

The act of “Stacking” rewards Stacks (STX) token holders with bitcoin for locking up their tokens and participating as consensus-critical signers.

While Stacking has been live since the Stacks launch, the Nakamoto Upgrade introduced a new role of "Signer." Signers participate in the Stacks protocol by validating and signing blocks produced by Stacks miners. These Signers will ultimately enable programmable Bitcoin via sBTC later this year by processing deposits and withdrawals of BTC into the system.

Since Nakamoto instantiation in April 2024, dozens of signers have joined the network as signers.

World-class infrastructure providers like Figment, Luganodes, Chorus One, Blockdaemon, along with Stacking pools Xverse, Fast Pool, and StackingDAO have become signers and are already earning bitcoin rewards.

Critically, the Nakamoto upgrade makes the Signer network open for anyone to join. This guide will give an accessible introduction to help anyone become a Signer for the Stacks network, securing the network and earning bitcoin.

Here’s a quick outline of the post. Feel free to jump around, depending on your existing knowledge.

Before we get started, here are some terms to help guide you through the post.

Terms

Proof of Transfer (PoX): the Stacks consensus mechanism. It’s similar to Proof of Burn, except miners transfer the committed bitcoin to other participants in the network.

Stacking: Stacking rewards Stacks (STX) token holders with bitcoin for locking up their tokens for a certain time and participating as consensus-critical signers.

Stacking Cycles: Stacking happens in reward cycles of 2100 Bitcoin blocks (roughly two weeks). Reward cycles are split up into two phases — the prepare phase and the reward phase.

Stacker: an entity locking their STX to receive PoX rewards. This is a broad term including solo Stackers and Stackers who use pools.

Solo Stacker: an entity that locks their own STX and runs a signer. They don’t receive delegation.

Pool Operator: an entity that runs a Signer and allows others to delegate their STX to them. A pool operator doesn’t need to Stack their own STX, but they can. They will also run a signer, but the pool operator and signer address may be different.

Delegator: a Stacker who locks their STX and delegates to a signer or pool operator. They don’t run the signer.

Signer: an entity that runs the stacks-signer software and participates in block validation.

  • A signer can be either a solo Stacker or an entity receiving delegated STX. Depending on context, this may also refer to the signer software that validates blocks.

Introduction to Stacks

Stacks is the leading Bitcoin Layer, bringing smart contract functionality to Bitcoin, without modifying Bitcoin itself. There is currently a major upgrade to Stacks underway called the Nakamoto Release, an upgrade that will bring significant improvements to both security and speed.

Important: this guide will focus on how Stacks will work in the post-Nakamoto world (not how it currently works).

For a broader introduction, the Welcome to Stacks Guide gives a high-level overview of Stacks.

Stacking rewards token holders with bitcoin

Stacking rewards Stacks (STX) token holders with bitcoin for locking up their tokens for a certain time and participating as consensus-critical signers.

Since Stacks launched, Stackers have earned over 3,000 BTC, according to Signal21.

Stacking provides native bitcoin yield through the Proof of Transfer (PoX) consensus algorithm, where users lock STX and earn BTC rewards.

Proof of transfer (PoX) is an extension of the proof of burn mechanism. PoX uses the proof of work cryptocurrency of an established blockchain to secure a new blockchain. However, unlike proof of burn, rather than burning the cryptocurrency, miners transfer the committed cryptocurrency to some other participants in the network.

PoX enables yield similar to Proof of Stake networks. However, there are some key differences.

Key Differences Between Stacking and Staking:

Stacks is not a PoS network. This comes with two key differences.

  1. Yield Generation: In Stacking, users lock STX and earn BTC. In contrast, PoS networks generate yield in the same token that is locked.

  2. No Slashing: Stacks does not implement slashing. If a Stacker fails to perform their duties, they simply won't receive their BTC rewards or unlock their STX tokens.

PoX connects Stacks to Bitcoin. Core to the Stacks’ design is the understanding of the importance of Bitcoin and the reliance on Bitcoin and a foundation. Read more about PoX in the Stacks docs.

There are three primary ways to Stack:

  1. Solo Stacking: an entity that locks their own STX and runs a signer. They don’t receive an STX delegation from others.

  2. Pool Operator: an entity that runs a Signer and allows others to delegate their STX to them.

  3. Delegator: a Stacker who locks their STX and delegates to a signer or pool operator. They don’t run the signer.

This post focuses on Solo Stacking and Pool Operators, the entities that run a signer.

Stacks Signers

The Nakamoto upgrade introduces a new role of "Signer."

Signers participate in the Stacks protocol by validating and signing the blocks produced by Stacks miners.

In order to receive PoX payouts for stacking their STX tokens, Stackers must become Signers themselves or delegate this responsibility to another Signer, such as via a Stacking Pool or hosted service.

Stacks Signers play a crucial role in the Stacks ecosystem. They:

  1. Sign and validate Stacks blocks produced by Stacks miners.

  2. Sign and validate sBTC mint and redeem transactions (again, this guide is focused on a post-Nakamoto activation world).

  3. Earn BTC rewards for their work.

Ideals vs Reality

Ideally, every Stacks holder would be a signer for the network, creating a maximally decentralized network. However, similar to running a Bitcoin node, technical and financial requirements (and time and effort) mean that not every Stacks holder will be a signer.

That is ok, not every Bitcoin holder runs a Bitcoin node.

The purpose of this post is to help to increase the numbers of Stacks Signers. As the Stacks Signer network is open to anyone (different than a federated multi-signature model), the more Stacks signers onboarded, the more decentralized the network becomes.

3 Hours to Start Earning BTC

For technical folks with DevOps experience, one should expect to allocate about 3 hours to get started as a Stacks signer — expect a similar setup time to running a validator on Ethereum.

For non-technical folks starting from scratch, one could expect to take about 10 hours to get going as a Stacks signer. These are rough estimates, and it may take longer or shorter than estimated!

It will be technically challenging. However, we have experts, resources, other signers, small Discord chats, and more to guide you on every step.

We want you to succeed, so please reach out with questions.

Also, if you decide running a signer is not for you, token holders have a variety of providers and tools to support their participation in Stacking. The Stacks website contains a list of pools and stacking options.

How to Run a Signer

Requirements to Become a Stacks Signer

As a Stacks Signer, you will interact with the protocol directly. You’ll Stack in a trustless manner, earning BTC yield with no intermediaries.

Let’s look at some requirements you’ll need to meet to become a signer.

Meet the Financial Requirements:

  • Meet the dynamic minimum STX (typically around 100,000 STX).

    • There is a dynamic minimum since every cycle only 4,000 reward slots are available for Stackers. The minimum required for one reward slots can change from cycle to cycle, depending on the amount of STX Stacked. Read more here.

Meet the System Requirements:

Signer, Stacks node and Bitcoin nodes

  • 4 vcpu

  • 4GB memory

  • 1+ TB storage (1TB for Bitcoin node, 350GB for Stacks node, and 100 MB for stacks signer)

Signer only

  • 1 cpu

  • 250MB memory

  • 100MB storage

Meet the Technical Requirements:

Is Running a Signer Profitable?

Based on these requirements, you might be asking, is it worth it to run a signer?

Let’s break it down.

Based on the storage requirements and Google Cloud Vm instance pricing, it will cost about $341/month to run the equipment.

Given a potential APY BTC yield APY locking Stacks (we’ll use 6% APY as an illustration, not financial advice), let’s break down the profitability threshold. This is a rough estimate to give an illustration.

  1. First, let’s look at the annual cost of running Google Cloud (our breakeven)

    1. $341 per month * 12 months = $4,092 per year

  2. Now, we need to find out how much money, when invested at 6% APY, would yield $4,092 per year (how much do we need to invest to break even).

  3. We can use the formula: Principal = Annual Return / Interest Rate

    1. Annual Return = $4,092 Interest Rate = 6% = 0.06

  4. Let’s plug in the numbers

    1. Principal = $4,092 / 0.06 = $68,200

Based on this illustrative calculation, you would need to lock up $68,200 in Stacks to generate enough BTC yield (at 6% APY) to break even with the annual cost of running Google Cloud at $341 per month.

Given the 100,000 STX dynamic threshold, one could expect becoming a signer to be profitable if one already meets the minimum.

Of course, this calculation is based in USD, and earning in BTC is a special perk.

High Level Process

In order to run a signer, you'll need to run a signer and a Stacks node side-by-side.

The signer will monitor for events coming from the stacks node and is in charge of using the generated account (next section) to sign incoming Stacks blocks sent from the Stacks node.

At a high level, the Stacking Flow is as follows:

  1. Prepare for Stacking: Make API calls to get details about the upcoming reward cycle and confirm eligibility for a specific Stacks account.

  2. Lock STX Tokens: Confirm the BTC reward address and lockup duration, then broadcast the transaction to lock STX tokens before the next reward cycle.

  3. Receive Rewards: During the reward cycle, BTC rewards are sent to the designated address. After the lockup period, STX tokens are released.

Running a Stacks Signer

If you’ve made it this far and you’re ready to run a singer, we’ve created two resources to walk you through each step.

If you prefer to read and follow step-by-step, check out our docs: How to Run a Signer.

If you prefer a video guide, watch our two-part YouTube series.

Earn BTC, Secure the Network, Become a Signer in 3 Hours

In conclusion, the Stacks protocol offers a unique and rewarding opportunity for participants — earning BTC rewards.

By becoming a Signer, you can actively contribute to the security and functionality of the network while earning Bitcoin rewards. The recent Nakamoto upgrade has introduced the role of Signers, who validate and sign blocks, ensuring the integrity of the Stacks ecosystem.

This guide aims to provide you with a clear, accessible path to becoming a Stacks Signer, highlighting the requirements, processes, and benefits involved.

Whether you're an experienced blockchain participant or new to the Stacks community, this guide will help you navigate the steps needed to join the network and start earning Bitcoin rewards. Happy Stacking!


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