Stacks Network Consider Nakamoto Upgrade to Revolutionize DeFi on Bitcoin

Stacks Network Consider Nakamoto Upgrade to Revolutionize DeFi on Bitcoin

The Stacks Network considers the Nakamoto Upgrade to usher in a scalability era for DeFi in the Bitcoin ecosystem.

The leading Bitcoin layer-2 network, Stacks (STX), in market capitalization is undergoing an upgrade that will alter how individuals perceive Bitcoin. Stacks is among the oldest Bitcoin projects and hosts a thriving ecosystem. 

Stacks Unveils Nakamoto Upgrade

Stacks Network plans to activate the Nakamoto upgrade on Wednesday, August 28. The upgrade will bring fundamental changes, particularly in transaction speeds on the Bitcoin network. 

The upgrade targets reducing the settlement times by a third, from half an hour to ten minutes. Such represents a 100X enhancement that will dramatically transform the Bitcoin network’s usability.

Stacks intends to implement sBTC as a decentralized asset that is equally matched by Bitcoin a month after the Nakamato upgrade. sBTC is targeted at transferring BTC within the Bitcoin blockchain and Stacks as gas in transactions.

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The advancements in the network are set to become game-changers for the Bitcoin decentralized finance (DeFi) ecosystem, particularly the applications built on the network. 


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Recent projects on the Stacks blockchain suffer from lackluster speeds experienced on the Bitcoin network. The experience leads to sub-optimal user experiences that hampers the possibility of having high usage volume. Such restricts builders from offering complex DeFi products. 

A clear illustration of the challenge is Velar, a popular decentralized exchange (DEX) running in the Stacks ecosystem. Despite the complete optimization, the user experience is unattainable for peers on other networks, including Uniswap. 

 Lumx business development head Lugui Tillier considers the Nakamoto upgrade deployment will lift Velar’s user experience to match its peers. The Web3 expert considers Velar to leverage the upgrade to disseminate advantages as the leading decentralized blockchain. 

Nakamoto Upgrade to Revolutionize DeFi on Bitcoin

Tillier observes that the Stacks network could realize optimized potential that has been unrealized for several years. The timing of the upgrade is timely since the market is yet to show enthusiasm for developments running on Bitcoin. Such differs from the viral products built upon the Solana and Ethereum networks. 

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Market interest is traditionally oriented towards Bitcoin assets and not the ecosystem. Tillier observes a departure since the onset of 2023 following the unveiling of the Ordinals Protocol. The project triggered the popularity of creating non-fungible tokens (NFTs) and fungible tokens on the Bitcoin chain. 

Ordinals Protocol reignited a new wave of innovation around the Bitcoin blockchain. The change portrays the second phase of Bitcoin, in which developers discuss the blockchain’s scalability. 

The phase features multiple developers building Web3 products. Moreover, others are undertaking huge investments in layer-2 and DeFi protocols at unprecedented intensity. 

Tillier observes that the shift is evident, considering that only a handful of L2s existed before the Ordinals. The Web3 developer considers that 80 L2s are running on Bitcoin, with more in development.

Tillier observes that most investments have seen input from leading funds, including Binance, Polychain, Coinbase, and Pantera. Such portrays heightened institutional interest within the second phase of Bitcoin.

The upgrade in Stacks is timely when the ecosystem appears more mature, vibrant, and ready to optimize the blockchain value. The upgrade will likely prompt subsequent innovation that, for the longest time, appears to have burned around since the unveiling of the Ordinals protocol.

The situation prompts intriguing reflections on how to enhance the crypto ecosystem. The conversation likely changes growth in projects exploring Web3 development on the ecosystem. 

Additionally, L2 networks such as Stacks could usher the path for faster and cheaper platforms supporting smart contracts in the Bitcoin ecosystem. The primary question emerging is ascertaining what the future will hold for ETH when similar products are now developed and running on Bitcoin. 

Although it is too early to reach definitive conclusions, Tillier admits that the development undertaken so far defies the imagination of whether DeFi on Bitcoin would offer a critical reflection.  


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