sBTC (Stacks Bitcoin) Overview

sBTC (Stacks Bitcoin)
Overview:

Launch: December 2024 (phased rollout; withdrawals enabled by February 2025).

Mechanism: A decentralized, non-custodial Bitcoin layer on Stacks. Uses Proof of Transfer (PoX) consensus, where "Stackers" lock STX tokens to validate transactions and earn BTC rewards.

Deposits: BTC sent to a multisig wallet controlled by a rotating set of signers, triggering automatic sBTC minting.

Withdrawals: sBTC burned via threshold signatures (70% consensus) to release BTC.

TVL: $97 million (as of Feb 2025), showing steady growth since launch.

Pros:

No fees: Free conversions between BTC and sBTC.

Bitcoin finality: Transactions settle on Bitcoin, inheriting its security.

Fork resistance: Automatically mirrors Bitcoin's chain state, avoiding depegging.

Cons:

Limited liquidity in the Stacks ecosystem.

History of delayed execution on development milestones.