Stacks utilizes proof of Transfer to connect to BTC with a 1:1 block ratio. BTC miners spend the BTC to participate in mining and create new blocks on the stacks blockchain. This reduces electricity consumption since Minted BTC is used as proof of computation.
The Stacking process is a unique way of staking by this network whereby instead of burning the BTC used as a proxy for computing resources, miners send it to stackers where who have locked their STX token in exchange for BTC rewards from miners. It is through this connection that it is able to leverage the security and network superiority of BTC, while neatly injecting smart contracts to the ecosystem.
Since it is anchored to BTC, the time it takes to mine a block is similar to that of BTC which is usually around 10 minutes. However, just like many other L2's, they have a nifty scaling solution utilising "micro blocks", which enhances transaction throughput and speed. It works by the use of anchor blocks which are blocks that are confirmed simultaneously to BTC blocks, in between the anchor blocks, micro blocks are created and make for rapid transaction settlement. Transactions included in micro blocks will be confirmed once the associated anchor block has been approved.
The STX token is mostly used for:
- Staking
- Transaction fees
It also has an 82bn vol cap and contains halving schedules.
However, stacks have a relatively small ecosystem compared to other L2's, this is somewhat influenced by the programming language used Clarity, whereas it contains great features for building on stacks, a lot of devs just don't want to learn yet another language so as to build for a niche platform. Examples of protocols include:
- Stackswap: The Uniswap of Stacks
- Alex Labs: A protocol that allows you to trade, farm, earn and even launch projects(basically Pancakeswap)
- Gama: BTC NFT marketplace
- Liquidum: NFT lending platform
Arkadiko: a self-repaying loan platform using BTC earned from staking</li>
However, the project looks promising with planned future updates promising amazing new features like:
Nakamoto's release includes further speed and scalability updates to improve transaction time to 5 seconds.
In the future, they also plan to unlock BTC liquidity using SBTC, a new asset that will be pegged one-to-one with BTC. This will create a flywheel economy that will grow the ecosystem.
