Stacks (STX)

Stacks (STX) is the native token of Stacks, a network that adds smart contracts and applications to Bitcoin. STX pays transaction fees on Stacks, rewards the miners who produce its blocks, and can be locked up, a process called stacking, to earn rewards paid in bitcoin. The network describes itself as a Bitcoin layer 2, because it records its history on Bitcoin and settles against it.

STX is a separate asset from Bitcoin (BTC), and Stacks is a separate network from the Bitcoin blockchain: it has its own blocks, rules and token, and changes to it need no change to Bitcoin. The project began as Blockstack, founded in 2013 by Muneeb Ali and Ryan Shea, and is now supported by the Stacks Foundation and the developer company Hiro Systems.

Bitcoin is very good at one job: keeping a secure record of who owns which coins. It is not designed to run programs such as lending apps. Stacks is like an annexe built next to a strong old vault. The annexe has its own rooms where more complicated business happens, and at regular intervals it writes a summary of everything into the vault's ledger, so that nobody can quietly change the annexe's records later.

To run the annexe, Stacks uses an unusual arrangement. People who want to produce its blocks pay in bitcoin, and that bitcoin goes to STX owners who agree to lock up their tokens for a while. It is a little like a market stall owner paying rent to the people who keep the market running, with the rent paid in a different currency from the one used inside the market.

Blockstack spent its early years building tools for decentralized applications. In July 2019 the United States Securities and Exchange Commission qualified its token sale under Regulation A+, the first time an offering of crypto tokens had been cleared under that route. The sales, which closed in September 2019, raised about 23 million dollars, of which 15.5 million came from the Regulation A+ offering. Stacks 2.0, the network in its current form with smart contracts and stacking, launched in January 2021, and the company Blockstack PBC was renamed Hiro Systems.

The Nakamoto upgrade, activated on 29 October 2024, cut the time between Stacks blocks from roughly Bitcoin's ten minutes to a few seconds and made Stacks transactions as final as the Bitcoin blocks they are anchored to. sBTC, a token backed one-for-one by bitcoin, opened for deposits on 17 December 2024 with an initial cap of 1,000 BTC, and withdrawals back to Bitcoin went live on 30 April 2025.

Stacks blocks are produced through a mechanism called Proof of Transfer (PoX). Instead of burning electricity, as in proof of work, or putting tokens at risk, as in proof of stake, would-be miners commit bitcoin in Bitcoin transactions to compete for the right to produce Stacks blocks and receive newly minted STX. The bitcoin they spend is sent to STX holders who have locked their tokens for one or more reward cycles of about two weeks. This is different from staking in that stackers are paid in another asset, bitcoin, rather than the network's own token. Roughly, each stacker's share of a cycle's bitcoin is:

• $\text{BTC committed by miners}$ is the bitcoin miners spend during the reward cycle.
• $\text{Your stacked STX}$ is the amount a stacker has locked for that cycle.
• $\text{Total stacked STX}$ is the amount locked by all stackers.

For example, if miners commit 50 BTC during a cycle and a stacker holds 2 percent of all stacked STX, the stacker receives about $50 \times 0.02 = 1$ BTC. Actual payouts are made in reward slots and depend on minimum stacking amounts, so small holders usually join pools.

• Fees. STX pays for transactions and smart contracts, written in a language called Clarity, on the Stacks network.
• Stacking. Holders lock STX to earn bitcoin and help secure the network.
• Bitcoin DeFi. sBTC lets bitcoin be used in Stacks decentralized finance applications and redeemed back to BTC, like a wrapped token but managed by a group of independent signers.
• Applications. Stacks supports decentralized applications and NFTs that settle on Bitcoin.

Because of its Regulation A+ sale, STX began life as a token sold under United States securities law, and its later status has been debated in the wider argument over cryptocurrency regulation. Critics argue that Stacks is not a true layer 2, since STX holders and miners, rather than Bitcoin itself, secure its state, and that sBTC depends on its signer group behaving honestly. Others note that the token supply has no fixed cap, that rewards depend on miner demand, and that STX, like other tokens, is volatile.

• Stacks
• Stacks documentation
• Stacks Foundation