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Leading Bitcoin layer-2 scaling solution Stacks (STX) just began crucial upgrade, the Nakamoto release – with the update set for a two phase launch heading into May – find out more in STX price analyis.
Bitcoin is not only the most valuable cryptocurrency but also the most secure. As the first cryptocurrency to launch, developers are looking for ways to leverage these valuable properties and, most importantly, introduce a layer on top of it, enabling faster and cheaper transactions with smart contracts capabilities.
The Stacks blockchain is one of the many platforms aiming to ride on Bitcoin. It essentially improves the network and makes it programmable. It aims to be a leading base for scaling decentralized applications (dApps) launching on Bitcoin.
According to a report on April 22, Stacks just began one of its most crucial upgrades—the Nakamoto release. The update will be in two phases and conclude in May.
Once completed, Stacks, its developers claim, will offer faster transactions (around 5 seconds settlement), release a new consensus system, and, most importantly, pave the way for the release of a new asset: sBTC.
So, What Does Stack’s Nakamoto Release Entail?
Most protocols launching as a layer-2 on Bitcoin often aim to tap into the network’s unparalleled security of over 650 EH/s, according to YCharts.
This means aligning their block production with Bitcoin. While safe, this introduces challenges: Like the underlying network, the platform suffers from congestion when demand spikes.
To resolve this, Stacks developers are releasing the Nakamoto upgrade to decouple its block production from Bitcoin. Accordingly, they expect transaction processing to be smoother and faster.
While this is a refreshing step for active users, the introduction of sBTC, a fungible token that pegs the price of Bitcoin, is the cherry on top of the cake.
This token differs from the initial versions because it is permissionless, meaning users retain control of their assets.
Accordingly, users can tokenize their BTC, convert them to sBTC on Stacks, and engage in various activities, including stacking or DeFi.
In this way, sBTC opens up new verticals for billions, if not trillions, of dormant BTC held in the mainnet.
STX Price Analysis: Nakamoto Impact on STX Price
Following the announcement of this upgrade, STX prices edged higher, as shown by the daily chart. The token is nearly up +40% from last week’s lows.
Though STX plunged to as low as -42% from April highs, the sharp recovery in the past week has been impressive.
(STXUSDT)
As excitement builds, STX might reclaim $3.8, extending gains from November 2023 – especially amid fresh footing above the 20DMA.
At spot rates, STX is already up 4X in five months.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
