sBTC Updates - Weekly MegaThread

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.


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

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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.


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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.


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