Stacks recap: August 2022 edition

written by George Peacock

Stacks recap: August 2022 edition

August has been a month of technical groundwork to bring Stacks more speed, security, and functionality. Here’s our recap of the most exciting developments. ⚙️

TL;DR

  • Stacks’ 2.1 upgrade, bringing major mining and stacking improvements, is around the corner
  • DLCs – trust-minimized, non-custodial, Bitcoin-based smart contracts – are about to change the Bitcoin DeFi game
  • Subnets, a new way to scale Stacks’ mainchain, should launch come Q1 2023 🔥

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Stacks 2.1: Taking mining and stacking to the next level

The Stacks Foundation has announced Stacks 2.1, an upgrade that will:

  • Enable more efficient Bitcoin yield via stacking
  • Strengthen Stacks’ bridges with other networks
  • Simplify the ways developers manage interactions between Stacks and Bitcoin, and lay the groundwork for Subnets (more on this later)

Let’s dig into two of Stacks 2.1’s most important improvements, stacking and mining. 👇

Stacking improvements

Stacks 2.1 will allow for continuous stacking, eliminating the current pesky “cool down” period. Stackers will be able to stack as much as they want, for as long as they want. 👀

Additionally, the upgrade will make it easier to create and automate a decentralized stacking pool, thereby allowing more people to participate with lower minimums.

Mining improvements

The upgrade will also make it far easier to create and manage decentralized Stacks mining pools. That is:

  • The coinbase reward block will be able to send STX rewards to a smart contract
  • Out of this contract, pool participants will be able to withdraw their share of the reward, based upon their pro rata contribution of Bitcoin

This new mechanism will allow more people to participate in STX mining. 💪

Bitcoin plus DeFi minus trust = DLCs

Aki Balogh and the team behind DLC.Link are using Discreet Log Contracts (DLCs) to bring DeFi-like smart contracts to Bitcoin, allowing users to simultaneously:

  • Use Bitcoin as a productive asset
  • Avoid trusting third-parties
  • Maintain control over their funds

In particular, DLCs allow people to use their Bitcoin as collateral for loans without having to worry about trusting a custodian. And with that, the concerns related to Bitcoin DeFi custodial solutions just go poof. ✨

Using Subnets to scale Stacks

As you might remember, Stacks is anchored to and secured by the Bitcoin blockchain. But, just like Bitcoin, Stacks needs solutions to scale. That’s what Stacks Subnets (previously known as Hyperchains) do, by bringing to the Stacks mainchain an extension mechanism that mirrors Bitcoin’s block timing mechanism. 

Subnets are designed for projects that require high data throughput and speed – think NFT mints or trades on decentralized exchanges. Users move to and from Subnets by either depositing or withdrawing assets from the desired Subnet smart contract on the Stacks mainchain. As such, each project can balance the tradeoffs of speed and decentralization depending on their particular needs: Functions can be completed on a Subnet when speed and throughput is paramount and then moved to the Stack’s mainchain when decentralized security is more important.

Hiro expects to launch Subnets on the mainchain beginning in Q1 2023. Developers (and enthusiasts) may enjoy this August video demo demonstrating how to use (mint, deposit, transfer, and withdraw) an NFT within a Subnet contract. 

Introducing sarah.btc

Friend of Bitcoin, Stacks, NFTs, and more, sarah.btc recently joined Okcoin. Follow her for spicy takes about Bitcoin, Stacks, and Taylor Swift. 🌶

George Peacock is a Stacks’ enthusiast, slowly recovering from FinTech and TradFi. He’s the co-author of “The 3 simple rules of investing” and the standup half of the Cocktails & Comedy show. Follow him on Twitter to keep up with Stacks. 💜

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