Stacks Nakamoto Upgrade

STX has never missed out on the market hype surrounding the BTC ecosystem, but previous hype was more like a "castle in the air" without a solid foundation. After the Nakamoto upgrade, Stacks will offer the market higher expectations through improved performance and sBTC.

Written by: Sleeping in the Rain

I previously mentioned the BTC ecosystem, specifically highlighting Stacks and the Nakamoto upgrade. Today, let's continue this topic and talk more about the Stacks project.

Let's quickly go over the basic information about Stacks. (Stacks is an old project, so let's just briefly review these details.)

From my personal perspective, $STX has never missed out on the market hype around the BTC ecosystem, but previous hype was more like a "castle in the air" without a foundation. After the Nakamoto upgrade, Stacks will offer the market higher expectations through improved performance and sBTC.

So, what exactly did the Nakamoto upgrade change?

1. Performance

Previously, Stacks' block confirmation time followed that of Bitcoin (PoX consensus mechanism), with a block time of about 10 minutes. This meant that as a Bitcoin Layer2, Stacks was not up to standard. While it inherited Bitcoin's security, it did not significantly improve performance over Layer1.

After the Nakamoto upgrade, according to Grayscale's estimates, Stacks' block time and gas fees dropped from 6min/6.65u to 5s/0.25u.

Higher performance means a better user experience, and a better experience means greater appeal to users and developers. This will become the foundation for the development of the Stacks ecosystem. For example, trading memes on Stacks used to be exhausting, but now it will be much easier. We can also expect more possibilities for Stacks DeFi, such as a wider range of DeFi products and more DeFi participants.

Additionally, Stacks is optimizing the Nakamoto upgrade to achieve lower latency and higher bandwidth. See this article for reference ⬇️

In terms of approach, Stacks is still committed to solving its previous shortcomings to achieve higher performance. Only with higher performance can it compete with other high-performance Layer1/Layer2 solutions.

2. $sBTC

Speaking of DeFi, after the Nakamoto upgrade, the sBTC upgrade is expected to happen in early December (at the earliest), with more upgrades planned for January next year and beyond. The Nakamoto upgrade is the foundation for the sBTC upgrade, and the December upgrade will optimize the Stacks token issuance mechanism and launch sBTC.

By the way, I hope it won't be delayed repeatedly like the Nakamoto upgrade.

After the upgrade, sBTC could become one of the most important assets in the crypto market (previous issues with $WBTC also helped the development of cbBTC and sBTC, and Coinbase has delisted $WBTC).

For sBTC, the most important thing to watch is its adoption metrics. We can also see that Stacks is actively promoting sBTC adoption, such as partnering with Bitcoin ATM operator Coinflip to integrate Stacks and sBTC, and introducing sBTC to Aptos, Solana, and more.

For sBTC, the growth model of cbBTC is very much worth referencing. For example, supporting Moonwell and using $WELL tokens (and pumping $WELL) as rewards to drive cbBTC adoption. (And Stacks is well-funded, having recently raised another $20 million; they can definitely use real money to incentivize sBTC adoption, such as incentivizing sBTC adoption in lending protocols on Stacks, Aptos, and Solana.)

Overall, the outlook for Stacks is still positive: the Nakamoto upgrade brings higher performance and introduces sBTC as the core asset of the Stacks ecosystem, while Stacks' strong financial backing further boosts expectations for sBTC adoption.

Finally, a side note. Recently, many major chains have been rolling out upgrades, such as Fantom Sonic and Avalanche9000, all with the core goal of driving public chain adoption. It is foreseeable that the next few months will be quite exciting, and the public chain wars are about to begin again~

Enjoy