Stacks is a Layer-2 blockchain solution built on Bitcoin, and it’s ready to take a major step forward in bringing liquidity to Bitcoin.
With the upcoming launch of sBTC Cap-2, Stacks will increase its capacity to support 3,000 BTC — a significant stretch for the ecosystem as it pushes to create a seamless bridge between Bitcoin and the world of decentralized finance, or DeFi. When you consider the exciting features that the live sBTC Cap-2 access will enable as part of the user experience in the Stacks ecosystem, the launch seems likely to boost the bridge-building operation.
Opening Deposits for sBTC Cap-2
sBTC Cap-2’s launch is set to significantly increase Bitcoin liquidity. On top of the initial reserves of $BTC, we are now providing an additional 2,000 $BTC for sBTC users. Starting at 10 AM ET, these will be available on a first-come, first-served basis, with a minimum requirement of 0.01 $BTC to participate in this event. Users of Stacks can then use the asset sBTC, which is 1:1 pegged to Bitcoin, to participate in decentralized finance on that layer 2 ecosystem. This means, in effect, that while using sBTC for DeFi systems on Stacks, users have access to a Bitcoin-holding asset.
The crucial thing is that launching sBTC Cap-2 will give Bitcoin holders a way to dip their toes into the decentralized finance world while still enjoying the protection and hashing power that comes from holding Bitcoin. Withdrawals of sBTC are expected to start in March 2025, which means you’re free to go fishing in the DeFi sea for roughly a year and a half and still have time to come back and get your sBTC before the supply that’s not locked up runs out.
sBTC: A 1:1 Bitcoin-Backed Asset for DeFi
sBTC is a breakthrough in combining Bitcoin’s unrivaled security with the opportunities provided by decentralized finance protocols. As a 1:1 Bitcoin-backed asset, sBTC enables an easy, secure way for users to engage with DeFi in the Stacks ecosystem. Right now, the total annualized yield on sBTC is around 5%. And that’s income paid out as Bitcoin. If you’re a Stacks user, then you’re likely earning passive income through the DeFi protocol that we call the Stacks ecosystem.
What distinguishes sBTC from other Bitcoin-derived assets is its unique incorporation of Bitcoin’s native hash power. This guarantees, in a manner altogether different from how other assets tethered to Bitcoin accomplish the same end, that sBTC is not only secure but also reliable. This is to say that, as with Bitcoin itself, users can interact with sBTC in decentralized, trustless fashion—that is, without needing to place trust in any other entity. When it comes to sBTC, all the relevant entities are decentralized and should be considered trustworthy.
DeFi Protocols and Opportunities on Stacks
Users and developers have noticed that Stacks has now set its sights on DeFi. With the launch of sBTC Cap-2, Stacks is offering users the chance to connect with some of the most exciting DeFi projects around. Users can now engage with almost every DeFi protocol on our platform. You can lend, borrow, and stake with the sBTC; and do you know what? You can earn way more than in those “old, boring, yield-less” buckets that TradFi calls financial products.
Several leading DeFi protocols on Stacks have already incorporated sBTC, giving users a diverse array of choices for putting their Bitcoin-secured assets to work. Some of the principal protocols that back sBTC are:
– ZestProtocol: A decentralized yield generation and liquidity platform.
– Bitflow Finance: A DeFi protocol offering easy access to liquidity and yield opportunities.
– VelarBTC: A DeFi protocol dedicated to decentralized lending and liquidity markets backed by Bitcoin.
– Arkadiko Finance: A lending and borrowing platform in the Stacks ecosystem.
– ALEXLabBTC: A protocol for staking and managing Bitcoin-backed assets.
@Stacks is set to launch sBTC Cap-2, increasing its capacity by 2,000 $BTC to a total of 3,000 $BTC. Deposits, with a minimum of 0.01 $BTC, will open at 10 AM ET on a first-come, first-served basis, while withdrawals are anticipated in March 2025.
sBTC is a 1:1 Bitcoin-backed… pic.twitter.com/Fi51N13EMp
— Bitcoin Ecosystem (@BitcoinEcoTK) February 25, 2025
Each of these eight entities is an accelerator of a new kind of tokenomics—that is, a kind of economics revolving around blockchain tokens.
Only a few of the numerous opportunities that exist for users wanting to unleash the full potential of their Bitcoin holdings are represented by these platforms. Stacks has hinted at some additional announcements coming soon, with more decentralized finance protocols set to join the ecosystem and continue to push the possibilities for Bitcoin users in the DeFi space.
A Decentralized Future for Bitcoin Liquidity
While sBTC Cap-2 represents a major advance in integrating Bitcoin into DeFi, the Stacks team has truly ambitious plans for the future. One of the most thrilling aspects of this development is the expectation that the platform will shift to a fully decentralized sBTC system in 2025. This move is likely to solidly place Stacks as a key player in the DeFi world and offer users an unparalleled experience in moving between Bitcoin and DeFi—securely and with no apparent loss of decentralization.
The Stacks platform is dealing with one of Bitcoin’s most significant problems—the asset’s minimal interoperability with the decentralized finance (DeFi) world—by doing two things: “First, we’re increasing the capacity of sBTC. Second, we’re expanding the range of DeFi applications on Stacks.” These steps should allow Bitcoin holders to finally access the target state they want to reach with their asset—something the Stacks team is calling “DeFi for Bitcoin.”
Conclusion: The Future of Bitcoin and DeFi
sBTC Cap-2 is a groundbreaking step for Bitcoin in decentralized finance. By increasing the capacity for Bitcoin-backed assets and opening up new opportunities in DeFi (decentralized finance), Stacks is creating a path for Bitcoin to be adopted more widely in the DeFi space. Along with a 1:1 Bitcoin-backed asset, a 5% annual yield, and the ability to participate in a growing ecosystem of DeFi protocols, sBTC offers a compelling reason for Bitcoin holders to explore Stacks and engage with DeFi in a secure and innovative way.
As Stacks keeps moving forward and growing, the project occupies a vital position in closing the gap between Bitcoin and DeFi. Its launch of sBTC Cap-2 gives users a chance to experience the liquidity of Bitcoin on Stacks. Even better, the project has plans to launch a completely decentralized sBTC system. All this adds up to a solid new opportunity for Bitcoin holders to explore a potential income stream in a decentralized finance project that keeps making progress.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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