CoinMarketCap Alexandria takes a deep dive into Stacks, a Bitcoin layer building on top of Bitcoin’s proof-of-work consensus mechanism.
- What is Stacks
- Who is the Stacks team, investors and roadmap
- How does Stacks work
- Stacks and Bitcoin Ordinals
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What Is Stacks?
- The settlement of transactions on Bitcoin L1
- The Clarity programming language for smart contracts. It enables atomic swaps of assets with BTC. Clarity allows smart contracts to be safely used in a Bitcoin layer. A decision made to prevent many of the exploits and bugs of smart contracts.
The Stacks Team, Investors and Roadmap
The Stacks ecosystem consists of developers, researchers, community leaders and entrepreneurs that have been a part of the Bitcoin ecosystem for years. Stacks ecosystem decentralized a lot after the mainnet launch in 2021. It now has 30+ independent entities and the protocol upgrades are governed by the ecosystem. Some of the early contributors are:
- Muneeb Ali: Co-creator of the Stacks project. Muneeb is now CEO of Trust Machines which builds Bitcoin applications and contributes to Bitcoin L1 and L2 infrastructure.
- Ryan Shea: Co-creator of the Stacks project. Ryan is now an individual contributor and serves as advisor to the Bitcoin Frontier Fund.
- Jude Nelson: Stacks Core Blockchain Engineer. He is one of many engineers responsible for designing and implementing key components of the Stacks protocol, such as the Clarity smart contract language, the PoX consensus mechanism and microblock mining.
- Brittany Laughlin: Executive director of the Stacks Foundation. She manages the foundation’s operations, grants, partnerships and community initiatives.
- Ken Liao: CEO and founder of the Xverse wallet, and early engineer and contributor to the Stacks open-source project.
The Stacks investors include some of the prominent names in the crypto space, such as:
The 2019 Stacks offering was the first-ever SEC qualified offering and more than 4,500 independent entities and people participated in it.
How Does Stacks Work?
Stacks works like a layer-two solution for Bitcoin and following the Nakamoto release, transactions will be secured by 100% of the hash power of Bitcoin (reorg protection through Bitcoin L1). The release will also include a decentralized Bitcoin peg called sBTC, and atomic BTC swaps and assets owned by BTC addresses. Moreover, its secure programming language called Clarity allows for reading and writing Bitcoin state. Transactions are thus ultimately indirectly secured by Bitcoin.
The PoX consensus mechanism used by Stacks involves miners who spend Bitcoin to bid for becoming the leader in mining the next block and earn new Stacks tokens. There are also stackers who signal their support by stacking STX tokens and earning bitcoins. The leader election happens on the Bitcoin blockchain. Mined BTC serves as proof of computation.
The upcoming sBTC peg (to be released later in the year) for Stacks offers economic security with 1:1 BTC backing and incentive engineering. It enables a decentralized peg system with open membership for signers and relies on PoX consensus, Bitcoin finality, and BTC rewards for safety, incentive compatibility and liveliness.
In summary, upon launch of the upcoming Nakamoto release, Stacks will offer several advantages over other blockchains, including being secured by the entire hash power of Bitcoin, a trust-minimized Bitcoin peg mechanism, atomic BTC swaps and assets owned by BTC addresses, a safe programming language for smart contracts, knowledge of the full Bitcoin state, and fast, scalable transactions that settle on Bitcoin.
The Stacks Token
STX has a fixed, predictable future supply that halves every 4 years (like Bitcoin). The total STX supply will reach 1.82B by year 2050.
Stacks and Bitcoin Ordinals
STX surged in the aftermath of the hype around Bitcoin Ordinals. Stacks has native functionality to mint NFTs and is tipped to become a lot more popular if Bitcoin Ordinals are here to stay.
Furthermore, there are several DeFi and NFT projects building in the Stacks ecosystem:
The future of Stacks and Bitcoin Ordinals looks promising as they offer new possibilities for innovation and creativity on top of Bitcoin. However, they also face some challenges, such as low uptake and skepticism in the crypto community:
It remains to be seen whether Stacks and Bitcoin NFTs can maintain their positive momentum in the long run.