Stacks
Status
Mainnet
Type
Sidechain
Fee Token
STX
TVL
₿ 867
Stacks is a sidechain that aims to be programmability layer for Bitcoin. It uses a novel execution environment, Clarity. Stacks uses a hybrid PoS mechanism (PoX) and derives economic security from its native token (STX).
BRIDGE
DATA AVAILABILITY
OPERATORS
SETTLEMENT ASSURANCE
Risk Analysis
Bridge Custody
High risk
🚨
Users must trust centralized companies with custody of their BTC
Stacks has no consensus-enshrined BTC bridge. It does have two third-party bridges, which are both custodial multisigs. Users must trust the operators of these bridges to not steal their BTC, as they do not support unilateral exits.
Data Availability
Medium risk
⚠️
Only Stacks' state roots posted to Bitcoin. Data availability requirement is fulfilled through Stacks' full nodes
Stacks posts state roots to Bitcoin, but not full transaction calldata. Because of this, Stacks' state cannot be reconstructed using only data from Bitcoin. Stacks has a permissionless validator and node operator set which participate in making data availability readily available.
Network Operator
Medium risk
⚠️
Leverages a permissionless consensus mechanism
Stacks has a permissionless block production mechanism, but it does not support exits that circumvent its miner/validator set. This means that users must trust Stacks validators to include their transactions in blocks. Anyone with sufficient capital and resources can participate as a Stacks miner. The large majority of Stacks blocks are built by Bitcoin miners additionally mining Stacks.
Settlement Assurance
Medium risk
⚠️
State transitions finalized by permissionless, alternative consensus mechanism
Settlement is done offchain, on Stacks, rather than onchain, on Bitcoin. The validity of Stacks state transitions are not enforced by Bitcoin.
Bitcoin Security
Unilateral exits to Bitcoin not possible
Users cannot unilaterally exit from the Stacks sidechain with an L1 Bitcoin transaction. They currently trust centralized operators to process their withdrawals.
The protocol does not enable MEV on Bitcoin, but Bitcoin miners can extract MEV from Stacks
Stacks' mining process requires a Bitcoin miner to submit a block commit as a bid to build a Stacks block. It is possible for a Bitcoin miner to censor all bids to build Stacks' blocks when building a Bitcoin block. Since the active Bitcoin miner would be the only entity with the ability to win a Stacks block, they could submit a minimal amount of funds to win the block and receive all STX rewards. This MEV-extraction scenario looks to be solved in the upcoming Nakamoto upgrade.
An alternative token plays a role in network security
The STX token is required to pay for transaction fees and smart contract execution on the Stacks network. It is also used as a reward for miners who participate in the PoX consensus mechanism. The token is indirectly required for the security of the network, as block production by miners is incentivized by STX.
Stacks indirectly contributes to the security budget
Stacks sees Bitcoin miners bid on the opportunity to win Stacks blocks and earn fees for doing so. However, miners rewards are paid out in STX tokens via a distinct mining set up.
Withdrawals
Users trust centralized operators to process their withdrawals
Stacks users deposit BTC into Stacks through custodial bridge mechanisms. They trust that the operators of these bridges (e.g. aBTC and xBTC) will not steal their Bitcoin assets, or censor their withdrawals.
Technology
Clarity
Stacks leveraages the Clarity execution environment. The Clarity language is a subset of Lisp, and is not Turing-complete as a design choice. However, it is still expressive enough to build complex smart contracts and replicate much of the functionalities from Turing-complete environments like the EVM (i.e., DeFi, NFTs, etc.). Stacks is able to read Bitcoin state, due to both Clarity and its integrated PoX consensus mechanism. This allows for events on Stacks to be triggered by Bitcoin activity, or for smart contracts to read Bitcoin state during their execution.
Proof-of-Transfer
Proof-of-Transfer (PoX) is Stacks' consensus mechanism, based on Proof-of-Burn. PoX involves Bitcoin miners bidding BTC for the right to mint a Stacks block. The winning miner creates the block, and is rewarded with the STX block reward and STX transaction fees from the block. The miner's bid is paid to STX stackers (stakers). This system allows for STX stackers to earn native BTC yield, and creates an additional revenue stream for miners, similar to merge-mining.
sBTC
sBTC is still in development as of March 2024. It is a bridged version of BTC on Stacks. sBTC is minted by locking up BTC on Bitcoin, and is redeemable for BTC at a 1:1 ratio. sBTC is not yet permissionless, as withdrawals are permissioned by the validator set.
Faster block times
Stacks operates at the same block times as Bitcoin as of March 2024, roughly 10 minutes per block. However, the upcoming Nakamoto Upgrade in April 2024 will reduce block times to an order of seconds.
Lower fees
Stacks fees average in the order of tens of cents as of March 2024.
Use Cases
DeFi
The most popular use case for Stacks is DeFi. Stacks has a number of DeFi applications, including lending, borrowing, and decentralized exchanges.
NFTs
Stacks is home to a number of NFT projects, including digital art, collectibles, and indentity.
Operator
Stacks is operated by miners and validators
Block production is managed by Stacks miners (which are typically also Bitcoin miners, similar to the node overlap with classic merge-mining), by combining microblocks created by Stacks validators. Users trust the majority of validators and miners to not collude or censor.
Source Code
Code is open-source
All code related to the Stacks project is free and open source.