Stacks: An Overview

Stacks: An Overview

June 16, 2024


Stacks (STX) is a Layer-2 platform enabling smart contracts and dApps on Bitcoin, leveraging Bitcoin’s security. It uses the STX token and the Proof-of-Transfer (PoX) consensus mechanism. Recent milestone: 122,497 active accounts due to growing Bitcoin-native DeFi interest.

4 min. read

4 min. read

4 min. read

Bitcoin stands as the most decentralized, secure, and immutable blockchain network, but these strengths come with trade-offs. Its primary limitation is speed: with new blocks added only every 10 minutes, which is significantly beaten by Solana. This is where Stacks comes in. 

Stacks (STX) is a Layer-2 blockchain platform that enables smart contracts and decentralized applications (dApps) to be built on top of Bitcoin. Despite being different blockchains, Stacks and Bitcoin can operate together, allowing developers to build apps on STX while benefiting from Bitcoin’s economic security. 

Important Metrics of the Project

The platform operates using the STX token, which drives the execution of smart contracts, facilitates transaction processing, and enables the registration of new digital assets. It can also be used to earn Bitcoin rewards

Stacks has several notable features that set it apart from other Layer-2 Bitcoin networks:

  1. It employs a consensus mechanism called "Proof-of-Transfer” or (PoX), which utilizes Bitcoin's proof-of-work system. This approach enhances Stacks' scalability and decentralization without adding environmental impact from the original PoW system.

  2. It uses microblocks to accelerate transaction processing. While Stacks shares Bitcoin's block times, dividing blocks into microblocks reduces processing times from minutes to seconds.

  3. It has its own smart contract language called Clarity. A key advantage of Clarity is that it allows users to establish their own transaction conditions, rather than being restricted to preprogrammed ones.

Recent Stacks News and Milestones

Stacks has reached a new all-time high in active users, driven by growing interest in Bitcoin-native DeFi. In April, Stacks recorded 122,497 active accounts, which are addresses that performed at least one transaction, according to data provider Signal 21. The recent growing interest in active accounts indicates increasing interest in Bitcoin DeFi following the recent Bitcoin halving this 2024.

Disclaimer: The information provided in this research paper is for educational and informational purposes only. It does not constitute financial advice, investment guidance, or any solicitation to buy or sell financial instruments. The views expressed herein are those of the authors and do not necessarily reflect the opinions of Kollectiv.