Stacks is a new and innovative technology that brings the power of Bitcoin and the decentralized nature of blockchain to the world of smart contracts. This technology enables developers to build fully-expressive smart contracts that can use Bitcoin as an asset and perform final settlement on the Bitcoin blockchain, unlocking hundreds of billions of dollars of latent Bitcoin capital and making it productive for decentralized applications.
Table of Contents
Background
Bitcoin is the most decentralized, secure, and durable blockchain, and is widely used as a store of value by millions of people. However, the Bitcoin blockchain is slow, minimal, and conservative in its evolution, making it unsuitable for sophisticated applications that require fully-expressive smart contracts and high performance.
What is Stacks?
Stacks is a Bitcoin layer for smart contracts that enables applications to trustlessly use Bitcoin as an asset and settle transactions on the Bitcoin blockchain. It offers several innovations that make it unique, including a Clarity language for safe, decidable smart contracts, fast transactions that settle on Bitcoin, and a decentralized, two-way Bitcoin peg mechanism that enables smart contracts to trustlessly write to Bitcoin.
The Nakamoto release of Stacks introduces several new capabilities that enhance the power of the Stacks layer as a Bitcoin layer. The transactions on the Stacks layer will be secured by the entire hash power of Bitcoin after about 100 Bitcoin blocks, providing Bitcoin finality for Stacks transactions. The Nakamoto release also introduces a decentralized, non-custodial, Bitcoin-pegged asset, sBTC, which allows smart contracts to run faster and more cheaply without compromising safety. The Clarity language, a safe language for provable smart contracts, is also supported by the Stacks layer. The Stacks layer also has knowledge of the full Bitcoin state and can perform trustless reads of Bitcoin transactions and state changes. In terms of performance, the Stacks layer provides high performance and scalability through faster Stacks layer blocks and scalability layers like subnets.
The Stacks layer’s consensus protocol, Proof of Transfer (PoX), is inspired by Bitcoin’s Proof of Work (PoW) and is extremely energy-efficient, recycling PoW energy. The native token of the Stacks layer, STX, is essential to PoX consensus and provides incentives for Stacks miners and threshold signers.
$STX Token
The STX token is the backbone of the Stacks network, a decentralized platform that aims to bring DeFi, NFTs, apps, and smart contracts to Bitcoin. This innovative project is designed to be a decentralized peg for Bitcoin, enabling users to transact with Bitcoin in a secure and decentralized manner.
The STX token is critical to the success of the Stacks network. It is used to incentivize Stacks miners to maintain the network’s global ledger, and provides liveness guarantees to the sBTC peg, as well as incentives for threshold signers who participate in the peg mechanism. This is essential for maintaining the network’s decentralization, which is a key aspect of the Stacks project.
Additionally, the STX token serves as the basis for the economically secured decentralized Bitcoin peg. This means that it is used to secure the network and ensure that it remains live and functional. It is also used to reward miners on the open Stacks network, allowing them to earn Bitcoin as a reward for their contributions to the network.
The STX token is a unique and innovative aspect of the Stacks network, as it is central to the consensus mechanism of the network. The Stacks project has a strong focus on decentralization and has been designed to be legally compliant with public disclosures and transparency. This has led to the project being widely recognized as the first-ever SEC-qualified token offering in US history.
Features of Stack
Stack is a blockchain platform that is powered by the Bitcoin network. It offers a range of features that make it a versatile and powerful platform for developers and users alike.
Bitcoin-powered NFTs
Non-fungible tokens (NFTs) are a type of token that are unique and cannot be replaced with identical tokens. NFTs can represent a wide range of assets, from pieces of art to ownership rights to real-world assets like houses. On the Stacks blockchain, NFTs are created using Clarity smart contracts and are secured by the Bitcoin network. The chain is home to a marketplace for NFTs, called Gamma.io, where users can trade NFTs on the Bitcoin blockchain.
Bitcoin DeFi
Despite the growing use of Bitcoin as sovereign money, the cryptocurrency has yet to be as productive an asset for decentralized finance (DeFi) as other cryptocurrencies. Stacks is positioned to change this by enabling true Bitcoin DeFi. The Stacks chain is tethered to Bitcoin through its Proof of Transfer consensus mechanism, ensuring that all Stacks transactions settle on Bitcoin and share its long-term security. Furthermore, the Clarity programming language used in the protocol can read and react to changes in Bitcoin’s global state, and the STX token can generate BTC yield for users who choose to lock up their STX.
Bitcoin Name System
The Bitcoin Name System (BNS) is a network system that binds Stacks usernames to off-chain state without relying on any central points of control. BNS names have three properties: they are globally unique, human-meaningful, and strongly owned. The Stacks blockchain ensures that all nodes have a synchronized view of BNS, and each name’s owner can bind up to 40KB of off-chain state to their name. In BNS, reading name state is fast and cheap, but writing name state is slow and expensive because it requires one or more transactions to be sent to the underlying blockchain.
The motivation behind name systems is to provide a way to resolve names to off-chain state in a decentralized and secure manner. Name systems are critical to many different applications, including social media, the Domain Name Service, Git, and public key infrastructure. The BNS in Stack provides a powerful solution for developers and users who need a reliable and secure way to bind names to off-chain state.
Conclusion
The Stacks platform is a unique solution to the limitations of the Bitcoin blockchain, offering a layer for smart contracts that can use Bitcoin as an asset and settle transactions on the Bitcoin blockchain. With its Clarity language for safe and decidable smart contracts, fast transactions that settle on Bitcoin, and a decentralized, two-way Bitcoin peg mechanism, Stacks brings the power of Bitcoin and the decentralization of blockchain to the world of smart contracts.
The STX token plays a crucial role in the Stacks network as it is used to incentivize Stacks miners, secure the network, and provide liveness guarantees to the sBTC peg. The token is also central to the consensus mechanism of the network and is essential to the Proof of Transfer consensus protocol, which is inspired by Bitcoin’s Proof of Work and is energy-efficient.
