Deep Dive
1. Dual Stacking & sBTC Expansion (23 May 2025)
Overview: This update lets users stake STX and/or BTC to earn yield, while expanding sBTC’s decentralized Bitcoin peg for DeFi use.
The "Satoshi Upgrades" introduced self-custodial sBTC minting, allowing users to convert BTC to sBTC without intermediaries. Dual Stacking combines STX and BTC staking, offering up to 3%+ BTC rewards. Fee abstraction enables paying gas fees in sBTC, simplifying Bitcoin-native transactions.
What this means: This is bullish for STX because it deepens Bitcoin liquidity on Stacks, attracts institutional capital, and strengthens STX’s utility as a yield-generating asset. (Source)
2. Network Upgrade & Exchange Suspension (25 July 2025)
Overview: A major protocol upgrade caused Bithumb to pause STX deposits/withdrawals temporarily, highlighting network maturity.
The upgrade focused on improving block finality and preparing for trustless sBTC. While exchanges like Bithumb paused services as a precaution, the update aimed to enhance node efficiency and cross-chain interoperability via Wormhole’s NTT standard.
What this means: This is neutral for STX. Short-term exchange disruptions occurred, but long-term upgrades position Stacks as a secure Bitcoin L2. (Source)
3. SIP-031 Funding Proposal (30 May 2025)
Overview: SIP-031 proposed raising annual STX emissions from 3.52% to 5.75% for five years to fund developer grants.
The proposal targets ecosystem growth by allocating $30M+ to DeFi liquidity pools, hackathons, and infrastructure. It addresses Stacks’ funding gap compared to rivals, aiming to attract builders for Bitcoin-native apps.
What this means: This is cautiously bullish for STX. While inflation risks exist, sustained funding could accelerate adoption. (Source)
Conclusion
Stacks is prioritizing Bitcoin DeFi through trustless sBTC, staking flexibility, and ecosystem funding. While technical upgrades caused short-term friction, they reinforce its role as Bitcoin’s programmable layer. How will sBTC adoption impact STX’s value capture as Bitcoin liquidity flows on-chain?