Expanding our series on Bitcoin Layer 2 solutions, today we will look at the Stacks blockchain DeFi app. Stacks is the leading layer 2 blockchain solution for Bitcoin, and many new DeFi apps are launching on this blockchain. Stacks has a token called STX, which is currently trading at $2.51 on several major exchanges.
As these DeFi Apps on Stack (STX) grow in popularity, STX will see significant demand. Other Bitcoin Layer 2 solutions are also in development, but none come close to what Stacks has achieved. In any industry, it’s good to start early, but at the same time, it’s more important to be cautious and open-minded about new innovations and product-market fit.
These layer 2 solutions will help with Bitcoin adoption. Otherwise, Bitcoin could become primarily a store of value. As a medium of exchange, stablecoins are more popular, and all DeFi operations take place on Ethereum and ETH Layer 2 solutions or the Solana ecosystem.
Simply put, Stack and other layer 2 solutions for Bitcoin will pave the way for more widespread use of the Bitcoin blockchain.
The following is an excerpt from Aaron.D’s article about stacks.
There are several well-known scaling projects dedicated to helping Bitcoin scale. Lightning, RSK, Liquid BTC, and Stacks stand out among these projects. Lightning is in a league of its own because its engineers designed it to offer much cheaper transactions to Bitcoin. Meanwhile, RSK, Stack, and Liquid BTC offer additional features to Bitcoin, such as smart contracts, tokens, and asset issuance.
Anyway, consider this a beginner’s guide to getting the most out of the Stacks ecosystem. We will use this as a basis for research, and if the response is good, we will cover STX and Stacks in depth in the next article.
Best STX Wallet: (Stax Wallet)
Xverse Wallet – The Leading Wallet for Bitcoin Web3
This is one of the best wallets you can use to interact with the Stacks DeFi app. Xverse is the leading wallet for Bitcoin Web3, allowing users to connect to apps, securely store and transfer Ordinals and BRC20 tokens, earn BTC rewards through Stacks, and soon enjoy instant payments through the Lightning network.
The least mentioned, but most important feature of the Xverse wallet is that you can stake STX in your wallet and receive rewards in BTC. This is what makes STX so interesting, and if Bitcoin actually becomes a distant dream to acquire for many people, STX could be used as a way for many users to accumulate BTC.
Xverse is available on all major platforms, including iOS and Android, as well as the Chrome app.
Xverse also works with Ledger on desktop, we have a guide for that here. I didn’t test it, but rather created a new wallet to use the STX ecosystem.
If you are looking for other wallets, there are three other wallets supported in most Stacks DeFi apps. I personally like Xverse. This is because Xverse served as the North Star for the growth of the Stacks ecosystem.
- Leather Wallet: https://leather.io
- Asian Wallet: A multi-signature wallet for Stack and Bitcoin. https://asigna.io
- OKX Wallet
The list of new wallets is ever-growing, so it might be a good idea to stick with existing wallets like the Xverse or Leather or even the OKX wallet. According to the official site, these are more wallets.
How to get STX (Purchase STX) –
Before using the Stacks DeFi apps below, you must purchase STX and withdraw it to your Stacks wallet. The block time for the stack is 5 seconds after the Nakamoto upgrade.
STX is available on all major cryptocurrency exchanges, and you can purchase STX on any of these exchanges.
Where to buy STX tokens:
Afterwards, withdraw STX to your wallet to start DeFi activities in the Stack ecosystem.
great. Let’s assume you already have STX in your wallet. Now you’re ready to do a lot of things here.
Note: None of this is investment advice and should be used as educational content. Feel free to use this as a basis for your research and build your knowledge.
Now there are mainly three types of users:
- Traders – It is better to store your STX on a cryptocurrency exchange and trade it whenever you want and however you want.
- Long-term investors – You can withdraw STX to your Xverse wallet and stake it on a liquid staking platform, or you can also stake it directly using your Xverse wallet (more on this later).
- Cryptocurrency OG – If you have done your research and believe the narrative of Bitcoin Layer 2, you can join and participate in the growth of Stack and other Layer 2 solutions. They can be LPs (liquidity providers), early adopters, etc. This is often the riskiest and most rewarding part.
You may choose one or more of the above options based on your knowledge, time available for research and monitoring, and risk appetite.
Here’s what we’ve done so far:
- Set up a wallet to store your STX.
- I purchased STX tokens on a cryptocurrency exchange.
- I withdrew STX to my wallet.
Now let’s look at options for different things you can do with STX.
Note: This article was originally written in April 2024, and things can change very quickly in this industry. If you think this is out of date and needs updating, please ping me. Twitter @Creatonicss.
Stacking STX – Stack Token Staking
There are 3 ways to stake STX tokens:
1. Cryptocurrency exchange (beginner friendly) –
Some exchanges, such as Binance, offer flexible and fixed staking. Rewards are distributed in the form of BTC, which IMO is very good. The maximum period you can lock your STX on Binance is 120 days.
2. StackingDao – STX Liquid Staking Platform
https://stackingdao.com
StackingDao is STX’s first liquidity staking platform. The advantage of liquid staking is that the tokens are liquid. When you stake STX, the platform gives you a token called “stSTX” that can be utilized in other DeFi apps to generate additional profits.
The important thing to note here is that StackingDao pays out rewards in STX tokens instead of BTC.
3. Xverse Wallet STX Staking
The Xverse wallet has a built-in staking option, where you can earn rewards in BTC. Personally, I like STX, but I prefer receiving rewards in BTC.
A good idea is to earn BTC by splitting staking into StakeDao (liquid staking platform) and fixed staking on Xverse.
Again, there is no right or wrong here. It all depends on your personal preferences and risk appetite. Liquid staking is preferred by many because it keeps investments liquid and is very useful when times are not going well.
4. Lisalab – STX Liquid staking platform
https://lisalab.io
Lisalab is Alexlab’s latest liquid staking platform (detailed in this article). Being an Alexlab project gives us a lot of confidence, and it will be interesting to see how this project grows and how competing in the liquid staking space on Stacks will bring about healthy innovation.
You can use my referral code.AE3CE” Have you decided to join Lisalab?
Decentralized exchange and other features for Stack (STX)
When discussing the growth of an ecosystem, it is logical to expect tools such as DEXs, lending and borrowing platforms, and crypto bridges. In this section, we’ll take a look at all the products that exist and grow in the Stacks ecosystem.
Alexlab – Launchpad, DEX, etc.
Alexlab is one of the first DAPPS you will encounter when interacting with the Stacks ecosystem. Some features of Alexlab include:
- AMM DEX – Buy/sell tokens or provide liquidity to AMM pools.
- EVM Bridge – Transfers tokens between the EVM and the stack.
- BTC Bridge – Transfer tokens between Bitcoin and Stack.
- BRC20 Inscription – Securely distribute, issue and transfer BRC20 tokens without a cumbersome and unpredictable user experience.
- Launchpad – Launch your project tokens using a lottery-based hybrid launchpad.
Alexlab also has a token called “$ALEX”, which you can read about here. As this ecosystem grows and Alexlab becomes the best solution, we will build the next Uniwap or Jupiter. Again, nothing is certain and everything will depend on factors such as growth, adoption, and competition.
Alex is available on the following exchanges:
Arkadiko – stablecoin minted in the air 🥴
Arkadiko is a decentralized, non-custodial liquidity protocol that allows users to mint a stablecoin called USDA using assets as collateral.
To be honest, platforms like Arkadiko that allow you to issue stablecoins using liquid tokens are worrisome.
Imagine this:
- Liquidly stake STX for stSTX.
- Stable coins are issued using liquid staked tokens (stSTX).
- Buy more STX using minted stablecoins
- Now rinse and repeat. 🤣
This process cannot continue indefinitely and may eventually create bubbles. This is something that sometimes happens in traditional finance. If we see such a protocol growing too large, we will be extremely cautious.
Another platform called Bitflow allows you to convert minted USDA tokens to USDC. But just looking at the swimming pool makes it clear how unhealthy this situation is.
Once again, I hope this all goes well with an open mind, and ecosystem participants will do their best to prevent situations like the above from occurring (bubble).
Stax Pulse –
Real-time on-chain statistics for Stacks DeFi.
STXTools: Trade Analysis and Charting Tool
Many new projects, including memes and utilities, are launching in the Stacks ecosystem, providing a great opportunity for traders and investors to get involved early.
Meme projects such as:
There is something to be careful about. This is not investment advice but something you should not ignore.
STXTools helps you check charts, recent transactions, and whale watch.
Bitcoin Layer 2 list on Twitter:
I’ve created a list of notable companies, builders, and thought leaders on Twitter (X). if you like you You can sign up here. This list will help you stay updated on Stacks and Bitcoin Layer 2 updates. Always happy to share notes and learn from others.
If you would like to suggest new additions here, please send us a DM at: Twitter @creatonicss
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