To dive deeper and understand the design:

• sBTC Whitepaper
• sBTC Overview Deck
• sBTC Overview Site (you're on it!)
• Nakamoto Release of the Stacks layer

Stay up to date on progress:

• sBTC Roadmap
• Weekly sBTC Progress updates

Help out? Check out WGs: https://github.com/stacks-network/stacks/discussions

There are quite a few interesting unlocks with sBTC, but to simplify, sBTC enables a kind of ‘write’ for Bitcoin. With sBTC you can effectively take your Bitcoin, move it to the L2, and do all kinds of interesting things with it. Critically, smart contracts can interact with sBTC, opening the door for DeFi and really any type of applications you see in other ecosystems, but with the added security benefits of Bitcoin backing it.

Read more: Blog post: 10 ways sBTC Unlocks the Power of Bitcoin

There are other Bitcoin deployed assets on different blockchains with different tradeoffs but most often, these solutions require sending BTC to an intermediary or are reliant on a trusted federation of signers. Open membership and decentralization are key aspects of Bitcoin and will not be compromised on in the final design of sBTC. In addition, sBTC will be the only asset that is secured by 100% of the hash power of Bitcoin itself.

Other key features and differentiators:

• sBTC contributes to the security budget of Bitcoin without altering the base chain
• No mint/redeem fees
• Liveness incentives to ensure the system is always on
• Has an on-chain Bitcoin oracle
• Proximity to Bitcoin: 1) operations occur directly on the Bitcoin main chain, providing censorship resistance and 2) security with automatic settlement and 100% Bitcoin finality

Note: Some aspects of sBTC are still being designed and subject to change. This page will be updated as various elements become finalized.

sBTC operates by utilizing a synthetic asset model on the Stacks blockchain. To acquire sBTC, users swap their Bitcoin for sBTC through a smart contract. The value of sBTC is pegged to the value of Bitcoin, allowing users to represent their Bitcoin holdings in the form of sBTC on the Stacks blockchain. This synthetic representation enables users to engage in various DeFi applications, such as lending, borrowing, or trading, while still retaining the benefits and ownership of their underlying Bitcoin. The Stacks blockchain ensures the security and integrity of the sBTC ecosystem, while the value of sBTC remains tied to the value of Bitcoin.

Layer 2 solutions can be good for Bitcoin in a few major ways:

1. Reducing network congestion at the base layer; read more about this in the next FAQ.
2. Enabling new ways for Bitcoiners to deploy their holdings; learn more here.
3. Providing a possible long-term economic incentive for network participants: Without creating a flywheel economy for Bitcoin, value is limited to the market cap of BTC. After all Bitcoin is mined, the network will need incentives transactions from apps & products so that miners will continue to validate transactions and secure the chain. Creating apps and products with BTC capital on Layer 2’s can allow Bitcoin to attract and retain more users than if it were only able to act as a store of value.

Layer 2 scaling solutions are essential for Bitcoin because they address the inherent scalability limitations of the main blockchain. Bitcoin was intentionally designed with a limited script to reduce the blockchain’s attack surface and increase its security and durability. But, as Bitcoin gains popularity and usage increases, the capacity of the primary blockchain can become constrained by high demand for block space, leading to slower confirmation times and higher transaction fees. This has been increasingly common with the rise of Ordinals and recent BRC-20 activity.

Layer 2 solutions provide an off-chain framework that enables faster and more efficient transactions, alleviating congestion on the base layer and improving the overall scalability of Bitcoin without needing to change Bitcoin itself. These layers can also enable DeFi and other applications by providing smart contract capabilities. Thriving Bitcoin layers are vital for enhancing the usability and long-term viability of the network.

Bitcoin is the largest, most valuable, and most durable decentralized asset. Bitcoin layers like Stacks/sBTC and others can unlock the $500B in BTC capital using the Bitcoin L1 as settlement for decentralized applications. This is a tremendous opportunity; Bitcoin has a roughly 45% market share as of today, whereas Ethereum, has only 18% of the crypto market yet to date has seen most of the development and user activity. Ethereum has seen an explosion of DeFi, NFTs, and applications and as these mature, it follows that developers will look to access the green field of liquid Bitcoin capital by serving Bitcoiners.

Yes. sBTC is being designed from the ground up with the perspectives of Bitcoiners in mind (yes, even maxis!). The goal is for sBTC to be the most decentralized, most secure option for moving Bitcoin into a Layer 2 where smart contracts and complex (as well as cheaper and faster) applications come into play.

As a synthetic asset, sBTC allows Bitcoiners to maintain ownership of their Bitcoin holdings while gaining access to the expanding decentralized finance (DeFi) ecosystem. None of this changes Bitcoin itself and also does not require moving of value to Proof-of-Stake or other consensus models Bitcoiners have typically been wary of. Further, a healthy L2 ecosystem actually stands to benefit the Bitcoin network in the long-term by reducing congestion and offering an interesting economic incentive once all Bitcoin is mined.

Further, sBTC is unique in that via the Stacks layer, it is secured by the Bitcoin thanks to Proof-of-Transfer consensus. In other words, your sBTC will be backed by the might and security of the Bitcoin network itself.

sBTC is being built by a decentralized group of organizations and individual contributors within the Bitcoin ecosystem. A Stacks Resident manages an open Working Group that facilitates coordination among contributors.