February 21, 2024

Stacks Surges 3,028% in Annual Revenue, Preparing for Nakamoto Upgrade

Stacks’ remarkable financial surge, driven by the STX20 inscription protocol, outpaces the broader cryptocurrency market.

In the past year, Stacks, a prominent Bitcoin layer 2 solution, has experienced extraordinary growth, boasting a staggering 3,386% increase in quarterly revenue and an impressive 3,028% annual growth, reaching a significant milestone of $637,000.

The market capitalization of Stacks' native cryptocurrency, STX, has similarly skyrocketed, experiencing a notable surge of 203% quarterly and an impressive 598% year-over-year, reaching a milestone of $2 billion.

According to Messari’s 'State of Stacks Q4 2023' report, there has been a remarkable 363% quarterly increase in total value locked (TVL), translating to an impressive 773% rise annually, reaching $61 million. Moreover, the report indicates an outstanding yearly increase in average daily miner revenue by 1,015%, reaching $78,000.

The report underscores Stacks’ pivotal position within the Bitcoin layer 2 ecosystem and its promising future, particularly with the Nakamoto upgrade slated for April 2024.

Outlined in the project’s whitepaper, the Nakamoto upgrade promises significant advancements, including accelerated block times, assured Bitcoin transaction finality, mitigation of forking risks, and reduction in maximal extractable value (MEV) associated with Bitcoin.

The Nakamoto upgrade will also herald the launch of sBTC, a trust-reduced form of Bitcoin operable within the Stacks ecosystem. This integration aligns Stacks' decentralized finance (DeFi) capabilities with those of other leading DeFi platforms, enhancing its overall appeal and utility.

The financial trajectory of Stacks owes much to the STX20 inscription protocol, which has surpassed the growth metrics of Bitcoin and the broader cryptocurrency market.

Inspired by Bitcoin inscriptions, particularly the BRC-20 Ordinals, the STX20 protocol has catalyzed an unprecedented level of network activity, exemplified by over 10,000 transactions recorded in a single block in December — marking a historic achievement for Stacks.

The report also highlights platforms such as ALEX, Arkadiko, and StackingDAO, which have contributed significantly to the growth of the Stacks ecosystem. These platforms bolster Stacks’ DeFi ecosystem, evident in the 52% quarterly rise in daily transactions and a 65% increase in active addresses, indicative of heightened user participation and interest.

The surge in network activity has spurred users to prioritize transactions, leading to a 400% quarter-over-quarter increase in average transaction fees (measured in STX). Despite these significant increases, the average transaction fee in USD terms remains relatively low at $0.25.

In 2024, projects developed on the Bitcoin network are gaining traction within the crypto sector, identified as a key theme by industry insiders.

Nansen, an on-chain analysis company, lists this trend as one of its four ‘high-conviction bets’ for the year. Similarly, Hashdex, a Brazilian asset management firm, emphasizes the emergence of the ‘industrial era of Bitcoin’ as a pivotal development to monitor closely.

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