Stacks Hits Record User High, Propelled by Rising Bitcoin DeFi Interest
Summary:
Stacks, a leading Bitcoin layer-2 (L2) network, has recorded an all-time high of 122,497 active users due to growing interest in Bitcoin-native decentralized finance (DeFi). The increase comes after the 2024 Bitcoin halving and the launch of Runes, a new protocol for fungible tokens on the Bitcoin network. This trend indicates a shift to L2 networks, which offer smart contract functionality and lower transaction costs for Bitcoin - crucial for the ongoing development of Bitcoin DeFi. The current growth suggests Bitcoin DeFi could eventually match the innovation seen in Ethereum-native DeFi.
Stacks, the prominent Bitcoin layer-2 (L2) platform, has demonstrated new record-breaking active user engagement, fuelled by a surge in popularity of Bitcoin-native decentralized finance (DeFi). During April, the number of active accounts on Stacks, defined as addresses that carried out at least one transaction, climbed to a historic peak of 122,497. This data was released by Signal 21, a Bitcoin (BTC) data analyst company on May 2. The elevated account activity indicates a blossoming interest for Bitcoin DeFi, also regarded as BTCFi. This movement was noticed a little over week after both the 2024 Bitcoin halving event and the unveiling of Runes,a fresh protocol devised for issuing fungible tokens on the Bitcoin infrastructure. According to Andre Serrano, Manager of Product and Partnerships at Stacks, Bitcoin's Runes and Ordinals could promote enhanced activity on Bitcoin L2 networks given the rising transaction fees of the Bitcoin network which are projected to marginalize smaller transactions. In a conversation with Cointelegraph, Serrano stated that anticipating massive asset issuance on Bitcoin's L1 will escalate transaction costs, which could deter a significant number of users and transactions, thus making the shift to L2 networks a crucial development. Following the recent Bitcoin halving, the median transaction fees on May 1 dropped to $1.72 from their previous record-breaking high of more than $92 on April 20, as reported by CryptoQuant. L2 networks such as Stacks represent an indispensable aspect of BTCFi, providing options for lower charges and broadening potential use cases for the pioneer blockchain network. For example, Stacks L2 system facilitates the execution of smart contracts on the Bitcoin network. Additionally, Serrano claimed that for the Bitcoin network, which does not inherently support smart contract functionalities like Ethereum, L2 networks are more crucial. He believes that such L2 solutions offer a scalable solution for the Bitcoin network beyond its existing transaction boundaries. BTCFi has gained significant approval throughout the cryptocurrency sector. Nash Lee, the co-founder of MerlinSwap, suggests that if the present development rate continues, BTCFi could rival the innovativeness exhibited on Ethereum-native DeFi.
Published At
5/2/2024 3:20:41 PM
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