Stacks, Bitcoin layer-2 for smart contracts, has initiated the Nakamoto upgrade that will increase transaction speed on the network

Stacks, a Bitcoin layer-2 network, has initiated the Nakamoto upgrade on August 28, 2024.

This significant update aims to enhance the network’s scalability and efficiency by decoupling the block production schedule from Bitcoin’s.

stacks.btc on X: "Nakamoto Activation Window Begins 🟧 Today marks the beginning of a sequence to safely bring the Nakamoto upgrade and its fast blocks and Bitcoin finality to the Stacks layer! Celebrate with 21 days of events, big news, collaborations, giveaways, and more. 

Nakamoto will boost transaction speeds on Stacks. The upgrade is expected to reduce settlement times from 10 to 30 minutes or more, that follow Bitcoin’s confirmation time, to about 5 seconds, which is a substantial improvement over the standard Bitcoin settlement times.

The Nakamoto upgrade has received strong support from the Stacks community and is seen as a pivotal development for decentralized finance (DeFi) on the Bitcoin network.

It will also introduce sBTC, a decentralized asset backed 1:1 by Bitcoin, which is designed to enable smart contracts and dApps to utilize Bitcoin as a secure base layer.

sBTC is a decentralized asset backed 1:1 by Bitcoin. It facilitates the transfer of BTC between the Bitcoin blockchain and Stacks, and will also be used as gas in transactions.

Network operators have a two-week window to implement the Nakamoto upgrade.

Despite the positive changes, the total value locked (TVL) on the Stacks network has seen a decrease from $189 million to $88 million, indicating mixed market confidence following the upgrade.

However, this upgrade marks a new era for DeFi within the Bitcoin ecosystem, potentially unlocking billions in latent capital and fostering a more dynamic environment.

What is Stacks?

Stacks is a blockchain platform designed to bring smart contracts and decentralized applications (dApps) to the Bitcoin network. Unlike most blockchain platforms that operate independently, Stacks operates as a layer-1 blockchain that is connected to Bitcoin. This allows Stacks to leverage Bitcoin's security and decentralization while enabling advanced functionalities such as smart contracts and NFTs (non-fungible tokens).

Key Features of Stacks:

1.Smart Contracts on Bitcoin

Stacks enables the execution of smart contracts on Bitcoin without modifying Bitcoin's base layer. These smart contracts are written in a language called Clarity, which is designed to be predictable and secure, avoiding many of the pitfalls of other smart contract languages.

2.Proof of Transfer (PoX)

Stacks uses a unique consensus mechanism called Proof of Transfer. PoX links the Stacks blockchain to Bitcoin by allowing Stacks miners to commit Bitcoin in order to mint new Stacks tokens (STX). This ensures that the Stacks blockchain is anchored to the Bitcoin blockchain, inheriting its security properties.

3.Clarity Language

Clarity is a new smart contract language that is intentionally non-Turing complete, which means it avoids certain computational complexities to enhance security and predictability. Clarity contracts are transparent and can be easily audited before being deployed, reducing the risk of bugs or malicious code.

4.Ecosystem of dApps

Stacks supports a growing ecosystem of decentralized applications. These dApps can use Bitcoin as a base currency while benefiting from the functionalities provided by the Stacks blockchain.

5.Bitcoin Integration

Stacks allows developers to build applications that interact directly with Bitcoin, making Bitcoin programmable and extending its utility beyond being just a store of value or medium of exchange.

Use Cases

Decentralized Finance (DeFi)

Stacks enables DeFi applications on Bitcoin, such as decentralized exchanges, lending platforms, and more.

NFTs and Digital Ownership

The platform supports the creation and trading of NFTs, giving users a way to own and trade digital assets secured by Bitcoin.

Governance and DAOs

Stacks also supports decentralized autonomous organizations (DAOs) that can operate with Bitcoin's security and decentralization.

Stack’s STX token utility

The STX token is the native cryptocurrency of the Stacks blockchain, and it plays a central role in the network's ecosystem. Here are the primary utilities of the STX token.

1. Fuel for Smart Contracts and Transactions:

Transaction Fees

STX is used to pay transaction fees on the Stacks network. This includes fees for executing smart contracts, transferring tokens, and interacting with decentralized applications (dApps) built on Stacks.

Smart Contract Deployment

Developers need STX tokens to deploy smart contracts on the Stacks blockchain. The token acts as the fuel that powers these operations, ensuring that the network remains secure and efficient.

2. Participation in Stacking:

Earning Bitcoin

One of the most unique utilities of the STX token is its use in the Stacking process. By locking up a certain amount of STX tokens, users can participate in Stacking and earn Bitcoin (BTC) rewards. This process is integral to Stacks' Proof of Transfer (PoX) consensus mechanism, where Bitcoin is transferred to Stackers as a reward for supporting the network.

Network Security

Stacking helps secure the network by incentivizing participants to lock up their STX tokens, which in turn enhances the overall stability and security of the Stacks blockchain.

In summary, Stacks is a unique blockchain project that extends the capabilities of Bitcoin, bringing smart contracts, dApps, and more advanced use cases to the Bitcoin ecosystem.