5 Ways Stacks 2.1 Will Unleash Bitcoin

November 14, 2022
7 min
Stacks Bitcoin layer logo and 2.1 number on blue background

Here are 5 ways Stacks 2.1 will improve the Xverse user experience and mobilize the Bitcoin economy.

With a mission to unlock Bitcoin’s full potential, Stacks will soon be rolling out exciting updates for the latest 2.1 version of the network. Stacks is the top Web3 project on Bitcoin, bringing full stacking programming capabilities to the most trusted and secure blockchain. The Stacks 2.1 network proposals are set to strengthen the connection to Bitcoin. But how will this affect Xverse users? 

In this article, we'll explain five ways Stacks 2.1 will benefit Xverse users as well as walk you through the voting process through the app. Let's maximize participation and turnout for the proposal across the Stacks community!

5 ways Stacks 2.1 will mobilize the Bitcoin economy:

1. Continuous Stacking Cycles

When staking STX, users may select to participate in up to a maximum six cycles. Those who opt-in for only a single cycle are penalized with a “cooldown” period, thereby missing delegation for the following cycle. Furthermore, even those who opt-in for all six cycles will be subject to a cooldown period. This lack of flexibility around cycle participation results in stackers missing the opportunity for Bitcoin rewards. The update brings continuous staking, which means stakers can immediately lock for the next cycle and avoid the cooldown period. By not missing any cycles, participants are able to effectively increase their Stacking yield. Additionally, stackers will also have the option to increase the amount of STX locked in the pool by “topping off”.

2. Receive Stacking Rewards Using Any Bitcoin Address

Currently native SegWit addresses (those starting with bc1...) and taproot addresses are not supported by Stacks smart contracts. The update adds support for them, which means you will be able to use any Bitcoin address to receive your rewards and also save on BTC transaction fees.

3. BTC <> STX Swaps

While swapping BTC and STX is possible, there are some reliability issues since Stacks blocks are not always 1:1 with Bitcoin blocks. As a result, there’s a small chance that a swap will not be successful. The 2.1 update brings new Clarity smart contract functions that make it easy to parse and validate BTC transaction data. This means swaps will be 100% reliable and easy to build.

4. Bridges to Other Chains

The update also makes it easy for developers to build bridges to other chains, including oracles and other services. This means you'll be able to use Xverse to swap assets to and from other chains.

5. Sending Assets to BTC Addresses

While additional work will be required for Xverse and decentralized apps, the update should enable users to directly transfer tokens and NFTs to Bitcoin addresses. Likewise, recipients will be able to access them using a compatible wallet.

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