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- 1 Messari released the Bitcoin Stacks report for Q1 2023.
- 2 Stacks the layer for smart contracts and native token STX are gaining momentum.
Bitcoin is slowly gaining traction in the ecosystem race with key projects like Ordinals, BRC-20, BRC-721E, and Stacks, per Messari Report released on May 31, 2023. The quarterly jump in the average daily transactions is 34%, and in average daily active addresses is 35%. Stacks (STX) price rallied by 330% from $0.22 to $0.93, while the BTC market cap jumped only 46% in a quarterly time lapse.
Bitcoin Ecosystem Steadily Winning the Race – Messari
Stacks a layer in Bitcoin for smart contracts; apps are executed on this and settled in BTC. This setup utilizes the capital and security of BTC while facilitating arbitrary programmability, otherwise impossible on BTC’s settlement layer. STX works as a Proof-of-Transfer (PoX) consensus mechanism and programming language Clarity.
Using PoX, miners commit BTC to designated Stacks addresses participating in the consensus. Stacking is the process by which STX holders take part in consensus while earning BTC. It was launched as a part of the Stacking Mainnet launch in January 2021. Also, PoX runs parallel to PoW consensus, all while hashing and settling Stacks transactions on layer one.
The data reveals a steady rise in average daily transactions (ADT), which were 5,564 in Q1 2022, almost doubled in Q1 2023 to 9,174. A similar jump can be seen in the data for average daily active addresses (ADAD). However, financials and Total Value locked dropped noticeably.
The BTC ecosystem powered the activity surge for Q1 2023. Ordinals brought in newer use cases and hiked the demand for fungible and non-fungible tokens. They stored arbitrary data on the ecosystem, as ordinals are NFTs created directly on the blockchain. At the same time, Stacks is the principal programmability layer.
However, this rapid increase in ADT from 6,900 to 9,200 caused the network activity to escalate. As a result, the transaction fees hiked three times from $0.24 to $0.75. The rise is mainly due to a steep ascend in the STX’s value over the quarter.
The activity in 2023’s first quarter shows high volatility. Also, the catalysts for the spike are believed to be other than the stack. Ordinals inscription triggered the increased activity in BNS registrations and the overall transaction volume in early February 2023 of Stacks.
More on STX
STX, the native token of Stacks, is used for smart contract execution, transaction fees, staking, and security of Stacks on the data layer. However, BTC is used instead of STX in staking rewards. The circulating market cap for STX jumped to $1.29 Billion by 340.4% QoQ.
Primarily due to the 2.5% quarterly inflation rate, the price of STX increased slightly. They mainly use inflation to reward the miners placing downward pressure on prices. Interestingly, its Q1 2023 value is similar to Q2 2022, but revenue jumped by 27.7% in this time-lapse.
Also, the race of first completing the transaction reaches its epitome, and the demand for block space increases. The Stack fees for Q1 2023 transactions follow a similar pattern to that of BTC fees from BRC-20 or Ordinals, along with Ethereum fees from meme coins like PEPE.
The Stacks 2.1 update was launched on March 19, 2023, at block number 781,551, including the reversal of Stacks 2.0’s sunset time for PoX. Adding Clarity keywords for reducing the complexity and costs of select operations. This unique combination of smaller yet essential features in the update enabled two key elements; Bridging and decentralized mining.
Stacks are placed to cater to the increase in demand for NFTs—fungible tokens and decentralized finance (DeFi) into the Ecosystem. The introduction of Stacks 2.1 minimized the bridging requirement, allowing the incorporation of the assets in sophisticated applications.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
