Why is the Stacks Nakamoto upgrade so important?

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1 year ago

Author: @DefiIgnas

Translation: Plain-language Blockchain

The Bitcoin halving and the launch of Runes have been completed, and the next step is the Stacks Nakamoto upgrade. Here's why it's important and the Stacks protocol that needs to be followed:

The growing interest in Bitcoin Layer2 solutions and the presence of multiple tokenless protocols on Stacks make it a worthwhile option to consider.

This upgrade brings finality to Bitcoin and stronger resistance to MEV (flash network value capture), but these are technical and boring matters that don't really concern speculators.

You see, Stacks isn't interesting - the transaction speed is as slow as Bitcoin itself. If you have the patience to wait for a 10-minute transaction time, you can trade Ordinals, BRC20, and Runes on Bitcoin itself. Stacks can't compete with Bitcoin as a speculator.

For Stacks, the key upgrade is the fast 5-second block time, making Stacks exciting for DeFi and speculative trading.

The Nakamoto upgrade is starting today… but we'll have to wait for the activation window from May 15th to 29th. That's when the real fun begins, part of which is the issuance of new tokens on Stacks.

The bad news is?

There aren't as many protocols for mining because Stacks has its own development language - Clarity.

And the good news?

Having a limited number of protocols means there's an opportunity to cover the entire Stacks ecosystem, as funds will only flow into a few protocols.

Additionally, the native development language can prevent lazy forks. There will be a token airdrop shortly after the Nakamoto upgrade.

Liquid Staking is the easiest way to get involved in the Stacks ecosystem:

  • @LisaLab_BTC - Stake STX for LiSTX: https://app.lisalab.io/lisa/points
  • @StackingDao - Stake STX for stSTX here: https://app.stackingdao.com/stack?referral=SP1VZ4YCBD5YAZHHSM2S3YZTVJ8C68QY6T76YZC4

You can also earn additional points using STX LSTs in other protocols:

  • @Bitflow_Finance - A protocol or feature in the Stacks ecosystem. Deposit STX/stSTX LP to earn Bitflow points and 2.5x Stacking points.
  • @ALEXLabBTC - Provide LiSTX/STX LP to earn 2.5x LISA points.
  • @VelarBTC - Another DEX with good annualized returns.
  • @ArkadikoFinance - MakerDAO of Stacks. Deposit stSTX as collateral to earn 1.5x Stacking points, then mint $USDA stablecoin. Note: Arkadiko's $DIKOToken is now live. @ZestProtocol - Lending. Currently paused until May 5th due to a "hack" attack.

Memecoins on Stacks may attract more attention and trading volume due to the 5-second block time. Two main Memecoins:

  • @welshcorgi_coin: $WELSH is the first Memecoin, currently valued at $59 million.
  • @LeoCoinST - $LEO is a cat-themed Memecoin, valued at $14 million.

Finally, within 2-3 months after the Nakamoto upgrade, Stacks will launch a trustless BTC bridge and sBTC wrapper.

I hope Stacks can attract institutions and large holders seeking BTC returns to enter Stacks.

This will increase the total value locked (TVL) and raise the valuation of STX.

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