2025.5.08
Learn Series, Vol. 1:
Intro to Stacks
This is a decentralized community coordinated effort to educate the Asian crypto community about Stacks. Thank you to the SAF Local Digital Ambassadors @hodlstxbtc, @teteneko1 and @_kkmoat for making this available in Korean, Japanese and Mandarin.
Introduction to Stacks and Its Ecosystem
Stacks is the leading Bitcoin L2 that brings smart contracts and decentralized applications (dApps) to Bitcoin, unlocking new possibilities for innovation on the most secure and widely trusted blockchain. By anchoring to Bitcoin and leveraging its unparalleled security, Stacks enables developers to build scalable solutions while extending Bitcoin’s functionality beyond simple transactions.
Below are some key components of the Stacks ecosystem:
Stacks Blockchain
Stacks operates as a Bitcoin Layer 2 (L2) network, using the Proof of Transfer (PoX) consensus mechanism to link directly with Bitcoin. PoX allows Stacks miners to bid BTC, and in return, STX holders who participate in stacking can earn BTC rewards. This direct connection to Bitcoin ensures that all Stacks transactions are as irreversible as Bitcoin transactions.
Stacking: Earning BTC by Securing the Network
Stacking is a unique feature of the Stacks network that allows STX holders to earn Bitcoin rewards by locking up their STX tokens. Stacking supports the network’s security and consensus mechanism. Unlike traditional staking models that pay out native tokens, stacking rewards participants in BTC, making it particularly appealing for Bitcoin enthusiasts.
Key benefits of stacking:
sBTC: Programmable Bitcoin on Stacks
sBTC is a decentralized way to move your BTC from the L1 to the L2 and back. It allows users to bring BTC into the Stacks ecosystem and interact with dApps, DeFi protocols, and other services, making Bitcoin more productive within an L2 environment. sBTC is fully backed by Bitcoin on a 1:1 basis.
DeFi Protocols on Stacks
Stacks is home to a growing number of decentralized finance (DeFi) platforms that leverage Bitcoin’s security and liquidity. Ecosystem projects include:
Building on Stacks
Developers can build smart contracts and dApps on Stacks using Clarity, a predictable and secure smart contract language that offers visibility into Bitcoin transactions. This allows for innovative solutions that combine Bitcoin’s security with the flexibility of programmable smart contracts.
Conclusion
Stacks bridges the gap between Bitcoin and smart contracts, enabling a vibrant ecosystem of DeFi and decentralized applications anchored to the most secure blockchain. Whether you're looking to earn BTC through stacking, explore programmable Bitcoin like sBTC, or build scalable dApps, Stacks offers a powerful platform for innovation in the Bitcoin economy.
Stacks is the leading Bitcoin L2 that brings smart contracts and decentralized applications (dApps) to Bitcoin, unlocking new possibilities for innovation on the most secure and widely trusted blockchain. By anchoring to Bitcoin and leveraging its unparalleled security, Stacks enables developers to build scalable solutions while extending Bitcoin’s functionality beyond simple transactions.
Below are some key components of the Stacks ecosystem:
Stacks Blockchain
Stacks operates as a Bitcoin Layer 2 (L2) network, using the Proof of Transfer (PoX) consensus mechanism to link directly with Bitcoin. PoX allows Stacks miners to bid BTC, and in return, STX holders who participate in stacking can earn BTC rewards. This direct connection to Bitcoin ensures that all Stacks transactions are as irreversible as Bitcoin transactions.
Stacking: Earning BTC by Securing the Network
Stacking is a unique feature of the Stacks network that allows STX holders to earn Bitcoin rewards by locking up their STX tokens. Stacking supports the network’s security and consensus mechanism. Unlike traditional staking models that pay out native tokens, stacking rewards participants in BTC, making it particularly appealing for Bitcoin enthusiasts.
Key benefits of stacking:
- Earn BTC Rewards: Participants can earn up to 10% in native BTC by locking STX.
- Support Network Security: By locking STX, stackers contribute to the decentralization and security of the Stacks network.
- Non-Custodial Participation: Users retain full ownership of their STX throughout the stacking process.
sBTC: Programmable Bitcoin on Stacks
sBTC is a decentralized way to move your BTC from the L1 to the L2 and back. It allows users to bring BTC into the Stacks ecosystem and interact with dApps, DeFi protocols, and other services, making Bitcoin more productive within an L2 environment. sBTC is fully backed by Bitcoin on a 1:1 basis.
- Decentralized Signers: sBTC operates with a decentralized set of Signers who uphold institutional excellence, including BitGo, Kiln, Figment, Copper, and many others.
- Use Cases: With sBTC, users can participate in DeFi protocols, trade assets, and engage in various financial activities on Stacks L2 while benefiting from fast transactions and low fees.
DeFi Protocols on Stacks
Stacks is home to a growing number of decentralized finance (DeFi) platforms that leverage Bitcoin’s security and liquidity. Ecosystem projects include:
- ALEX: A decentralized exchange (DEX) and DeFi platform offering features like swaps, lending, and yield farming. ALEX provides a comprehensive suite of tools for DeFi users, enabling efficient capital deployment within the Stacks ecosystem.
- Hermetica: A protocol focused on Bitcoin-backed stablecoins and synthetic assets. Hermetica's flagship product, USDh, is a stablecoin backed by Bitcoin, providing a stable medium of exchange within the Stacks ecosystem.
- StackingDAO: A decentralized autonomous organization (DAO) that simplifies the stacking process for users. By pooling STX, StackingDAO enables participants to earn BTC rewards even if they don’t meet the direct stacking threshold individually.
- Zest Protocol: A Bitcoin lending and borrowing platform, allowing users to earn yield or access liquidity by lending and borrowing BTC.
- Bitflow: A Runes AMM enabling seamless trading of Bitcoin-backed assets on Stacks.
- Velar: An upcoming perpetual decentralized exchange (Perp Dex) for Bitcoin derivatives.
Building on Stacks
Developers can build smart contracts and dApps on Stacks using Clarity, a predictable and secure smart contract language that offers visibility into Bitcoin transactions. This allows for innovative solutions that combine Bitcoin’s security with the flexibility of programmable smart contracts.
Conclusion
Stacks bridges the gap between Bitcoin and smart contracts, enabling a vibrant ecosystem of DeFi and decentralized applications anchored to the most secure blockchain. Whether you're looking to earn BTC through stacking, explore programmable Bitcoin like sBTC, or build scalable dApps, Stacks offers a powerful platform for innovation in the Bitcoin economy.