Unlock the Power of Bitcoin with sBTC: A Revolutionary New Way to Leverage DeFi and Web3

Introduction

sBTC is an innovative fresh approach to utilize Bitcoin on the Stacks network. It is a reliable, remuneration-suited, and non-custodial two-way pegged resource that pledges to transform the DeFi and web3 space. Through sBTC, Bitcoin is now entirely configurable, enabling contracts on the Stacks network to write to the Bitcoin chain.

This is an exciting development that opens up a world of possibilities for developers looking to build on the Bitcoin blockchain. By combining Bitcoin’s security and decentralization with the power and flexibility of the Stacks network, users will be able to leverage the best of both worlds. sBTC is setting a new standard for digital asset usage and is destined to become a major player in the cryptocurrency space.

Take Control of Your Funds with sBTC: The Improved Version of Wrapped Bitcoin

sBTC offers an improved version of the wrapped Bitcoin (wBTC) concept, eliminating the need to trust a custodian to back the token at a 1:1 ratio with real Bitcoin. Instead, sBTC works with on-chain proof of reserves, whereby the Bitcoin held in reserve is publicly viewable and verifiable on the blockchain. This means that users can trust the system even more than with wBTC, as it provides a higher level of transparency and security. sBTC also provides users with a greater degree of accessability, as it will be part of stack blockchain offering. Ultimately, sBTC provides users with a secure and reliable way to take advantage of the benefits of Bitcoin while still having full control over their funds.

The Trustless, Non-Custodial System for Maximum Security

sBTC is a trustless, non-custodial system that provides users with a secure and reliable way to store their funds. It operates on a permissionless, open-membership model, meaning anyone is welcome to join the network and take part in the consensus process without the need for personal information or trust in a centralized federation. This consensus process is further secured by an economically-incentivized group of dynamic actors, providing users with the same security assurances that protect the Bitcoin network itself. Moreover, the fact that membership in this network is open to anyone incentivizes more and more users to join, further bolstering the system's security. With sBTC, users can rest easy knowing their assets are safe and secure, backed by the same robust security measures that protect Bitcoin and its users.

Unlock the Power of Trustless Asset Exchange with Peg-in's

Peg-in's are a system of trustless asset exchange. When you convert to sBTC, you deliver BTC to a multiparty signature wallet, which is maintained and safeguarded by the complete network of stackers. These stackers are brought together by economic incentives, such as the capital they lock up in stacking and the stacking rewards they receive. The threshold signature wallet is secured through cryptographic functions, ensuring that funds can only be accessed with the approval of multiple stackers. The stackers themselves are further incentivized through rewards to remain honest and vigilant of any potential risks. This system of trustlessness and incentives makes peg-in's an essential part of the decentralized stablecoin economy.

Significance of PoX

PoX is a novel consensus mechanism used by the Stacks layer that utilizes both Stacks and Bitcoin layers, similar to Bitcoin's PoW. Anyone can participate in PoX by spending BTC, and STX holders can lock their STX (called stacking) to earn Bitcoin rewards. PoX consensus records the BTC/STX price ratio, providing an on-chain Bitcoin price oracle.

Get Ready for 100% Bitcoin L1 Finality

Once the on-chain BTC peg-in operation is authenticated, an equivalent quantity of sBTC is generated in your wallet. This is feasible due to the Stacks network's inherent capacity to evaluate Bitcoin chain state, recognized as PoX. In addition, the Stacks chain is getting an upgrade that will give it 100% Bitcoin L1 finality. With Stacks2.1 upgrade all users will benefit from the increased security and performance. As a result, users will be able to securely transfer sBTC with the confidence that their transactions are backed by Bitcoin's finality.

Is Stacks competing with bitcoin?

STX token is essential for two core functions for PoX consensus mechanism of Stacks Bitcoin layer: (i) incentivizing mining Stacks blocks and (ii) providing liveness incentive and trustless Bitcoin peg. STX increases demand for Bitcoin block space, creating higher transaction fees for miners, and gives users fewer reasons to use other competing chains and assets. Bitcoin halvings mean miners must rely more on transaction fees.

Stacking Movement Gaining Momentum

The global stacking movement is growing rapidly (more details here)

This growing number of stackers demonstrates the increasing popularity of the stacking phenomenon and reflects the trust that people have in the STX network. This high level of capital locked in the network points to the growing ecosystem of users who are willing to back the value of the STX tokens. As more and more people join the stacking movement, the network continues to grow, and the value of the tokens continues to increase.

Unstealable BTC: Stackers can Keep it Secure

The question of whether stackers can collude to steal BTC is an important one. Fortunately, it is quite difficult to do so. If at least 30% of stackers behave honestly and do not attempt to exploit the system, BTC cannot be stolen from the wallet. But what if the BTC is stuck? Fortunately, there is a recovery mode that ensures that the BTC stacking rewards normally paid out to stackers will instead be used for peg-out requests, thus ensuring that the wallet remains secure and the BTC can move freely between wallets. This protection is key to the security of the stacking system and helps to ensure that no BTC will be stolen.

Liveness Ratio Ensures a Secure and Stable Peg-In Process

The sBTC system has a maximum “liveness” ratio of circulating sBTC to BTC at 50% of the total STX locked up in stacking. This ensures that the system remains incentive compatible and that all peg-ins are serviced in a timely manner. If the maximum supply of sBTC is ever reached, no further peg-ins will be serviced until the ratio has been restored. This helps to keep the system stable and secure, as it is essential that all participants receive incentives for participating in the system. In addition, having a maximum supply also helps to ensure that the peg-in process is manageable for all stakeholders and that liquidity is maintained.

No External Oracles Required

The worth of STX when weighed against BTC is calculated in a creative way. Dissimilar to most other markets, this system hinges on the entire combustion rate of Stacks miners as a prognosticator. Specifically, miners expend BTC in order to obtain STX in a lucrative way. As such, their burning rate supplies a great stand-in for the STX cost, thereby not necessitating the use of external oracles in any way. This is an example of an innovative system that applies on-chain resolutions to give exact valuation information.

Experience Frictionless Transactions with sBTC – No Fees and Added Security

The implemention of sBTC gives a host of bonuses for consumers, particularly the absence of fees related to peg in or out. This is doable thanks to the protocol's economic incentives, which effectively reduce friction for users. This is a major advantage over other systems, which often require costly fees to convert digital assets. As a result, sBTC allows users to seamlessly and cost-effectively convert digital assets, making it a highly attractive asset for those interested in exchanging digital assets. Additionally, the protocol’s economic incentives also provide users with an additional layer of security, helping to ensure the safety and security of their assets. With sBTC, users can rest assured that their digital asset conversions are secure and cost-effective.

Concluding Thoughts

In conclusion, sBTC is an ideal option for those who require the full programmability of native BTC. Its design is rooted in security, decentralization, and usability, making it an attractive choice for those looking to take advantage of the benefits of blockchain technology without sacrificing usability or security. Additionally, its smart contract capabilities are a must for anyone looking for a comprehensive blockchain solution that can handle a wide range of transactions. With sBTC, users can be sure that their transactions are secure, private, and decentralized, giving them the peace of mind that comes from knowing their assets are secure.