MAY 25, 2023
Stacks Ecosystem Project Review: Is BTC L2 the Next Narrative?
by Colin Wu, WuBlockchain
Note: This article is only for information sharing, without any interest relationship with the mentioned projects, and does not endorse any of them.
Recently, the popularity of Bitcoin onchain Ordinals Inscriptions and BRC20 has reignited community interest in Bitcoin's onchain ecosystem. According to @bcrypt5's dashboard, as of May 18, there are currently more than 7.5 million Bitcoin Ordinals Inscriptions minted, with a total fee payment of 1,360 BTC. With the enormous wealth effect in the early stages, more and more impractical BRC20 Memecoins of all kinds have emerged. There are currently over 24,000 BRC20 Tokens deployed, occupying a significant portion of block space. Glassnode shows that currently about 60% of transactions on the Bitcoin chain use Taproot, which once exceeded 75%, while at the beginning of the year it was only 1.5%. The increase in block size has led to an increase in transaction costs.
To address the block capacity issue brought about by Ordinals on Bitcoin, slogans about Bitcoin scaling have once again emerged in the community. With regard to scaling solutions, there are L1 scaling solutions like BCH, which directly modify the Bitcoin protocol to increase its transaction capacity, and L2 scaling solutions like Stacks, which builds an entirely new network on top of Bitcoin. BTC L2 Stacks naturally becomes the favored candidate for Bitcoin scaling and is seen by the community as a protocol that may achieve significant development. Stacks adopts the Proof of Transfer (POX) consensus mechanism, where miners need to spend BTC to mine new STXs, allowing Stacks to borrow the security of Bitcoin, and enabling BTC to be utilized on the Stacks chain for running smart contracts and dApps. Notably, Stacks is the first blockchain company that has issued tokens through the SEC Regulation A+ framework, and STX, as the native token of the Stacks network, is mainly used to pay network fees and miner rewards.
This article will review the major ecosystem applications on Stacks, selected based on official recommendations, protocol data, social data, and the author's focus, among other aspects.
Hiro Wallet is the most commonly used open-source wallet on the Stacks chain, helping users to store, receive or send assets on the Stacks network. It supports Ordinals but has not yet integrated with the Lightning Network. In addition, users can also stake STX via Hiro. The wallet currently supports operation as a browser extension and a desktop application, but the browser extension supports more features than the desktop application. Official data shows that Hiro Wallet has been downloaded more than 280,000 times.
Xverse is a non-custodial wallet that allows users to store, receive, or send assets on the Stacks. It supports Ordinals and has added biometric features to enhance the security and convenience of the wallet, but has not yet integrated with the Lightning Network. Users can experience Xverse as a browser extension and can also use the wallet on Android or iOS mobile devices. Users can stake STX to earn Bitcoin through the Xverse pool, which is built by the wallet's official team. In the 59th staking cycle (each cycle lasts 12 days), there were over 3000+ Stackers, with an average annual yield of 9%.
According to the official roadmap, Xverse's goals for Q2 include support for hardware wallets, subnet integration, multisig integration, and xBTC integration. They plan to achieve fast BTC payment through the Lightning Network and sBTC in Q4.
GoSats is a Bitcoin wallet developed by an Indian team, focusing on the Indian community. Its vision is for every shopper, consumer, and saver to use BTC and it has launched the GosSats Visa card, loyalty programs, etc. Users can earn Sats (the smallest unit of Bitcoin) as a rebate when they use BTC for consumption through GoSats.
ALEX is a Dex built on the Stacks, supported by the non-profit organization ALEX Lab Foundation. Users can trade, stake, provide liquidity, cross-chain, and use functions like Launchpad, which includes lotterys and IDOs, on this platform. ALEX currently supports bridging USDT from ETH or BSC to the Stacks network to become sUSDT. Currently, ALEX's TVL is approximately $33.25million. In addition, ALEX has established an on-chain order book BRC-20 trading market, equipped with a candlestick chart, currently supporting five types of assets: B20, PIZA, SHNT, MAXI, and LONG, with a trading volume of approximately $330,000 in the last 24 hours.
ALEX has issued ALEX Token, mainly used for liquidity mining incentives, staking earnings, and platform governance. In mid-January of this year, ALEX Genesis DAO was launched, with the ALEX Token as its core.
Stackswap claims to be the first fully functional Dex on the Bitcoin, allowing users to trade assets, provide liquidity, stake, cross-chain, Launchpad, NFT, and other functions, and has issued the STSW Token. Currently, Stackswap's LP Pool has assets worth over $300,000 and IBTC staked valued at over $5.3million. Notably, the platform's UI/UX design is very simple, possibly built by a small team, but they have been consistently publishing bi-weekly reports on Medium since November of last year.
UWU is a lending protocol based on the UWU Cash stablecoin built on the Stacks, designed by BitAcademy's nickole.btc. It is currently in the testing phase, and users can get test qualifications by joining the Discord community and filling out a form. Users deposit STX as collateral, and can borrow up to 66% of the value of the deposited STX in UWU Cash stablecoin. Currently, there is no interest required and no fixed repayment date.
UWU Cash is an over-collateralized stablecoin issued by the protocol. The protocol pegs the value of UWU Cash to $1, with each UWU Cash backed by $1.5 worth of STX as collateral support. That is, to borrow $1 of UWU Cash, at least $1.5 of STX must be staked as collateral. The protocol is required to maintain a minimum collateral rate of 150%. When the value of the collateral falls and the collateral rate drops below 150%, liquidation is triggered. The UWU protocol maintains the stability of the UWU Cash stablecoin through liquidation and arbitrage.
Notably, the UWU protocol is also attempting to introduce a stability module function independent of the protocol, allowing users to exchange UWU Cash for sUSDT at a nominal fee of 0.5%. The exchange of sUSDT for UWU Cash is free.
In addition, the UWU protocol has also launched the UWU Share Token (xUWU), with a maximum supply of 100,000 tokens. Users can receive 100% of the protocol's revenue by holding this token, but the token has no governance purposes.
Arkadiko is an open-source DeFi protocol on the Stacks that integrates swap, liquidity provision, and lending. Users can stake STX, xBTC, and ALEX to mint and lend out the algorithmic stablecoin USDA. USDA will be softly staked to $1, and the loaned USDA will need to pay an annual stability fee of 1%, which is the annual interest on the loan. Different collateral assets have different liquidation ratios: STX is 140%, xBTC is 130%, and auto-ALEX is 180%. When the value of the collateral falls and is insufficient to maintain this ratio, an auction will be triggered, a 10% liquidation penalty will need to be paid, and the collateral will be liquidated by a third-party liquidator, who will purchase the auctioned collateral at a discount.
According to official data, the current TVL in Arkadiko exceeds $7.3million, of which over $5.3 million are collateral assets.
Planbetter is a liquidity staking protocol on the Stacks. So far, over 88,000 Stackers users have staked 280 million STX, cumulatively earning 25.42 BTC in rewards. When staking with Planbetter, users can unlock their tokens at any time without any cooldown period.
Gamma is an NFT marketplace built for Bitcoin NFTs, integrating Stacks and Ordinals. Users can trade, create, mint, and auction NFTs on this platform. Currently, the most actively traded Stacks NFTs on this platform include BNS: Bitcoin Name System, Megapont Ape Club NFTs, and The Guests, among others.
Boom is a native NFT platform on the Stacks blockchain, introducing a new type of NFT called Boomboxes. It allows users to delegate lock their STX and receive an NFT as a certificate for automatic claiming of a part of the locked reward. The minimum lock amount for a Boombox is 100 STX. A new Boombox will be released each month by the official team.
Boom is built by a four-person team, which has been developing Stacks/Blockstack dapps since 2016. In future plans, Boom aims to provide a marketplace for user-customized NFTs or Boomboxes, BTC as a payment option for Boombox rewards, a fresh UI/UX design focused more on NFT display, and new ways to support creators.
TradePort is a multi-chain aggregated NFT marketplace that currently supports Stacks and Near chains, with plans to expand to Aptos and Sui. TradePort's platform is relatively comprehensive. Besides the typical list-to-sell function, it also provides one-click instant selling, data analytics charts, and portfolio management.
Satoshibles is a collection of algorithmically generated NFTs based on Ethereum and Bitcoin, featuring potential images of Satoshi Nakamoto. It has currently launched five NFT series: Satoshibles, Satoshibles Ordinals, Monster Satoshibles, Special Editions, and Beary Christmas. The floor price for Satoshibles on Ethereum is 0.079 ETH with an accumulated trading volume exceeding 2,000 ETH. The floor price for Satoshibles: The Ordinals on Bitcoin is 0.075 BTC, with an accumulated trading volume of over 1.34 BTC.
Satoshibles has collaborated with Stacks to establish the first NFT bridge between Ethereum and Stacks. The initial Satoshibles NFT was the first project to enter BTC via the Stacks cross-chain bridge. In the future, Satoshibles plans to establish a DAO and airdrop to Satoshibles holders when the time is right.
Stacks.btc is a domain service provider on the Stacks and also supports connections to the Lightning Network. The official Stacks.btc domain was registered using this service. Users can register a ".BTC" domain on this platform with 1-48 characters, including all lowercase letters and some special characters. The registration fee is uniformly 2 STX, and each domain is valid for 5 years.
Console is a Web3 chat community built on-chain, supporting Stacks and resembling Discord in style. Console allows users to utilize various crypto assets including wallets, NFTs, BTC, Ordinals, and DAO tools, and provides a set of tools for managing Web3 communities. The ConsoleHQ is currently open for beta testing to all users.
Sigle is an open-source Web 3 writing platform for content creators, currently supporting Stack, Bitcoin Ordinals, and Polygon networks. Sigle provides tools for writers or bloggers to create content or notes, with the created content receiving relative protection due to the platform's censorship-resistant features. After writing is complete, the platform stores the content on IPFS or on the Bitcoin blockchain.
Hirevibes is a Web 3 talent hiring platform dedicated to providing a rich talent pool for the crypto world. Employers can freely post information to attract talent on this platform, with numerous well-known projects including Polkadot, Immutable, and Avalanche recruiting talent through the platform. Users can also apply to join their favorite teams through this platform. Hirevibes has launched a bounty program with its native token VIBES on the Stack, where a portion of the bounty is used to reward successful recruitment cases. Both the applicant and the employer can share the bounty, stimulating the enthusiasm of both parties in the recruitment process.