Stacks ecosystem project review: Is BTC L2 the next generation narrative?

Author: nobody

Compiled by: Colin Wu

In May, the explosive growth of Bitcoin Ordinals Inscription and BRC-20 on the Bitcoin chain reignited the community's attention to the Bitcoin on-chain ecosystem. According to @bcrypt5 data panel, as of June 15, nearly 12 million Bitcoin Ordinals Inscriptions have been minted, with a total fee payment of 1,714 BTC. Accompanied by the early massive wealth effect, an increasing number of various BRC-20 Memecoins with no practical utility have emerged, with tens of thousands of BRC-20 Tokens currently deployed, significantly occupying block space in trading. Glassnode data shows that although the speculation around Ordinals is gradually cooling, about 30% of transactions on the Bitcoin chain still use Taproot, compared to only 1.5% at the beginning of the year. The increase in block size has led to higher transaction costs. As the speculative bubble weakens, the market is gradually entering a phase of focusing on the infrastructure development of Ordinals.

One of the significant issues brought by Bitcoin Ordinals Inscription is the difficulty of Bitcoin block capacity to support larger infrastructure development. Regarding scaling solutions, there are L1 scaling solutions like BCH that directly modify the Bitcoin protocol to increase its transaction capacity, as well as L2 scaling solutions like Stacks that build a new network on top of Bitcoin. BTC L2 Stacks has thus logically taken advantage of Bitcoin's scaling opportunities and is seen as a protocol with potential for significant development by the community. Stacks adopts a proof-of-transfer (POX) consensus mechanism, where miners need to spend BTC to mine new STX, allowing Stacks to leverage Bitcoin's security while enabling BTC to be utilized on the Stacks chain for running smart contracts and dAPPs. Notably, Stacks is the first blockchain company to conduct token issuance under the SEC Regulation A+ framework, with STX as the native token of the Stacks network, primarily used for paying network fees and miner rewards.

This article will review the main ecological applications on Stacks, comprehensively selected from the perspectives of official recommendations, protocol data, social data, and the author's focus.

1. Wallets

1. Hiro Wallet

Hiro Wallet is the most commonly used open-source wallet on the Stacks chain, helping users store, receive, or send assets on the Stacks network, supporting Ordinals but not yet integrated with the Lightning Network. Additionally, users can stake STX through Hiro. Currently, the wallet supports browser extensions and desktop applications, but the browser extension has more features than the desktop application. Official data shows that Hiro Wallet has been downloaded over 280,000 times.

2. Xverse

Xverse is a non-custodial wallet that allows users to store, receive, or send assets on the Stacks blockchain, supporting Ordinals and adding biometric features to enhance wallet security and convenience, but it has not yet integrated with the Lightning Network. Currently, users can experience Xverse through the browser extension and also use the wallet on Android or iOS mobile devices. Users can stake STX to earn Bitcoin through the Xverse pool created by the wallet's official team. In the 61st staking cycle (each cycle lasts 12 days), there are about 300 Stackers, with an average annualized return of 9%.

According to the official roadmap, Xverse aims to support hardware wallets, subnet integration, multi-signature integration, and xBTC integration in Q2, and plans to achieve fast BTC payments through the Lightning Network and sBTC in Q4.

3. GoSats

GoSats is a Bitcoin wallet developed by an Indian team focused on the Indian community, with the vision of enabling every shopper, consumer, and saver to use BTC, and has launched the GoSats Visa card and loyalty programs. Users can earn Sats (Satoshis) back when spending BTC through GoSats.

2. DeFi

1. ALEX

ALEX is a decentralized exchange (Dex) built on the Stacks chain, supported by the non-profit organization ALEX Lab Foundation, where users can trade, stake, provide liquidity, cross-chain, and access features like lottery and IDO Launchpad. Currently, ALEX supports bridging USDT from ETH or BSC to the Stacks network as sUSDT. The current ALEX TVL is approximately $18.55 million. Additionally, ALEX has established an on-chain order book BRC-20 trading market equipped with candlestick charts, currently supporting dozens of assets such as B20, PIZA, SHNT, MAXI, and LONG, though trading volume in the last 24 hours has been relatively low.

ALEX has issued the ALEX Token, primarily used for liquidity mining incentives, staking rewards, and platform governance. In mid-January this year, the ALEX Genesis DAO was launched, centered around the ALEX Token.

2. Stackswap

Stackswap claims to be the first fully functional Dex on the Bitcoin chain, allowing users to trade assets, provide liquidity, stake, cross-chain, access Launchpad, and NFTs, and has issued the STSW Token. Currently, the Stackswap LP Pool holds over $450,000 in assets and over $5.3 million in IBTC staking. Notably, the platform's UI/UX design is extremely simple, and its social media presence is not very active, possibly built by a small team, but it has consistently published bi-weekly reports on Medium since last November.

3. UWU Protocol

UWU is a lending protocol based on the UWU Cash stablecoin built on the Stacks chain, designed by nickole.btc from BitAcademy, currently in the testing phase, with testing qualifications available through community forms. Users can deposit STX as collateral and borrow up to 66% of the value of their deposited STX in UWU Cash stablecoin, with no interest and no fixed repayment date currently required. UWU Cash is an over-collateralized stablecoin issued by the protocol, anchored to a value of $1, with each UWU Cash backed by $1.5 worth of STX as collateral, meaning that to borrow $1 of UWU Cash, at least $1.5 of STX must be used as collateral, and the protocol must maintain a minimum collateralization ratio of 150%. If the collateral value falls and the collateralization ratio drops below 150%, liquidation will be triggered. The UWU protocol maintains the stability of the UWU Cash stablecoin through liquidation and arbitrage. Notably, the UWU protocol also attempts 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%, while exchanging sUSDT for UWU Cash is free.

Additionally, the UWU protocol has launched the UWU Share Token (xUWU), with a maximum supply of 100,000 tokens, allowing users to earn 100% of the protocol's revenue by holding this token, although it has no governance purpose.

4. Arkadiko

Arkadiko is an open-source DeFi protocol on the Stacks chain that integrates trading, liquidity provision, and lending, allowing users to collateralize STX, xBTC, and ALEX to mint and borrow the algorithmic stablecoin USDA. USDA will be soft-pegged to $1, and loans of USDA will incur a 1% annual stability fee, 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 the ratio, an auction will be triggered, requiring a 10% liquidation penalty, and a third-party liquidator will liquidate the collateral by purchasing it at a discount.

According to official data, the current Arkadiko TVL exceeds $5.4 million, with approximately $3.95 million in collateral assets and an LP TVL of $1.5 million.

3. Liquid Staking

1. Planbetter

Planbetter is a liquid staking protocol on the Stacks chain, with over 88,000 Stacker users having staked 280 million STX, accumulating 25.42 BTC in rewards. Using Planbetter for staking allows users to unlock tokens at any time, with no cooling cycles.

4. NFT Marketplace

1. Gamma

Gamma is an NFT trading market 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 the platform include BNS: Bitcoin Name System, Megapont Ape Club, The Guests, and others.

2. Boom

Boom is a native NFT platform on the Stacks chain that has launched a new type of NFT: Boomboxes. It allows users to delegate locking their STX and receive an NFT as an automatic receipt for the locked reward portion. The minimum locking amount for Boomboxes is 100 STX. The official team will release a new Boombox every month.

Boom is built by a team of four, who have been developing Stacks/Blockstack dapps since 2016. In future plans, Boom will provide a trading market for user-customized NFTs or Boomboxes, payment options for Boombox rewards in BTC, a new UI/UX design that focuses more on showcasing NFTs, and new methods to support creators.

3. TradePort

TradePort is a multi-chain aggregated NFT trading market, currently supporting Stacks and Near chains, with plans to expand to Aptos and Sui. The TradePort platform has a comprehensive set of features, including regular listing sales, one-click instant sales, data analysis icons, and portfolio management.

5. NFTs

Satoshibles features a possible image of Satoshi Nakamoto, through an algorithmically generated NFT collection based on Ethereum and Bitcoin. Currently, five series of NFTs have been released: Satoshibles, Satoshibles Ordinals, Monster Satoshibles, Special Editions, and Beary Christmas. The floor price for Satoshibles released on Ethereum is 0.0696 ETH, with a cumulative trading volume exceeding 2,000 ETH; the floor price for Satoshibles: The Ordinals released on Bitcoin is 0.035 BTC, with a cumulative trading volume of 1.78 BTC.

Satoshibles has collaborated with Stacks to establish the first NFT bridge that can cross-chain between Ethereum and Stacks. The initial Satoshibles NFT was the first NFT project to enter BTC through the Stacks cross-chain bridge. In future plans, Satoshibles intends to establish a DAO and provide airdrops to Satoshibles holders at the appropriate time.

6. Domain Names

1. btc.us

A domain service provider on the Stacks chain that supports connections to the Lightning Network. The official Stacks Twitter account Stacks.btc uses this domain service. Users can register ".BTC" domain names ranging from 1 to 48 characters, with characters including all lowercase letters and some special characters. The registration fee is 2 STX, and each domain is valid for 5 years.

7. Social

1. Console

Console is a Web3 chat community built on-chain, supporting Stacks, with a style similar to Discord. Console allows users to use crypto assets, including wallets, NFTs, BTC, Ordinals, DAO tools, and provides a set of tools for managing Web3 communities. ConsoleHQ is currently open for public testing to all users.

8. Others

1. Sigle

Sigle is an open-source Web 3 writing platform for content creators, currently supporting Stacks, Bitcoin Ordinals, and Polygon networks. Sigle provides tools for writers or bloggers to create content or notes, and the content created is protected due to the platform's anti-censorship features. After writing is completed, the platform stores the content on IPFS or on the Bitcoin chain.

2. Hirevibes

Hirevibes is a Web 3 talent hiring platform dedicated to providing a rich talent pool for the cryptocurrency world, where employers can post job listings for free. Notable projects such as Polkadot, Immutable, and Avalanche have recruited talent through this platform, and users can also apply to join their desired teams. Hirevibes has launched a bounty program on the Stacks chain with its native token VIBES, where part of the bounty is used to reward successful recruitment cases, allowing both applicants and employers to share the bounty, promoting enthusiasm on both sides of recruitment and application.