Latest Developments in the Stacks Ecosystem and the Outlook for the Satoshi Nakamoto Upgrade

Recently, the development of the Bitcoin ecosystem has provided more support for the Stacks theory. The solid growth in demand for Bitcoin block space indicates that the demand for products built on Stacks will further increase. Stacks is committed to creating a platform for exploring more complex and refined Bitcoin-denominated utility tools, and, if technical conditions permit, ultimately transforming into a true second layer network for Bitcoin. This vision is gradually being realized, and the Stacks development team plans to complete the Satoshi Nakamoto upgrade before the Bitcoin halving in April next year.

Despite the strong momentum of Stacks, recent attention to Stacks has decreased due to a shift in market focus. This presents us with a unique opportunity - as several key milestones are about to be achieved, the theoretical foundation of Stacks has strengthened, but public attention has diminished.

This year, the average transaction fees on the Bitcoin network have surged 50 times, far exceeding Ethereum's 2-fold increase, highlighting the strong demand for Bitcoin's block space. The ongoing development of Ordinals indicates that people want Bitcoin to be more than just a holding asset. Bitcoin's status as a global macro asset has been strengthened, and the market's demand for alternative stores of value is also increasing, further solidifying Bitcoin's dominance.

The growth in demand for Bitcoin mainly stems from its stable performance as a store of value, as well as the regulatory clarity expected from the approval of a U.S. spot Bitcoin ETF. These external factors have increased the demand for the products being built by Stacks: an efficient, flexible, and secure Bitcoin pricing environment for exploring more complex Bitcoin applications and ultimately completing the transition to a true Bitcoin Layer 2 network.

Meanwhile, despite Satoshi Nakamoto's upgrade development taking up most of Stacks' resources, Stacks has received less attention over the past few months. The Stacks development team has completed Mockamoto (simulated Satoshi Nakamoto), which will be used to bring Satoshi Nakamoto nodes and RPC endpoints online. This is a key milestone that allows the Stacks team to launch the Satoshi Nakamoto mainnet as planned in April next year, scheduled to coincide with the Bitcoin halving.

This upgrade may be one of the most important catalysts. Currently, the Stacks network is relatively cumbersome, as its block time is the same as Bitcoin's first layer and it does not support bridging Bitcoin for security reasons. After the upgrade, Stacks will significantly speed up, reducing the block time to 5 seconds, and will support sBTC - a secure and efficient wrapped version of Bitcoin, naturally integrated with the Stacks consensus mechanism. Despite existing technical limitations, the Stacks ecosystem remains resilient, with multiple strong teams continuing to build in this field.

After the upgrade, Stacks will be secured by 100% of Bitcoin's hash rate, bringing it closer to a second layer network of Bitcoin. We anticipate several significant events in the future that will attract attention to STX:

1. It is expected that the Bitcoin spot ETF will be approved in January next year, sparking widespread discussion and promotion from large financial institutions, which may affect STX.

2. Stacks is collaborating with Singapore's Spartan Group and South Korea's DeSpread to expand its global influence. Marketing activities will be launched in the first quarter of next year in South Korea, Singapore, Hong Kong, and Dubai to raise awareness of Bitcoin's second layer.

3. Stacks will announce several key milestones before the Satoshi Nakamoto upgrade in March next year, and is expected to gain more attention in the coming weeks. The second testnet is planned to launch before January next year.

4. New first-layer Bitcoin tools like BitVM can achieve minimal trust transfer between the first and second layers of Bitcoin, bringing Stacks closer to becoming a true second layer of Bitcoin.

The relative valuation of STX against BTC and other first-layer/second-layer ecosystems has reached significant levels. It is expected that by April next year, Stacks may complete the Satoshi Nakamoto upgrade, providing the first fully operational Bitcoin-denominated ecosystem. STX is currently trading at 0.15% of BTC's fully diluted market cap, while the total of Ethereum's second layer is 10% of ETH's fully diluted market cap. Although the discount is reasonable, the current magnitude indicates the potential upside for STX.

After the Satoshi Nakamoto upgrade, Stacks will be able to provide a high-performance Bitcoin-priced NFT market, not only for more efficient Ordinals trading but also including a unique second-layer NFT series. Through the sBTC mechanism, Ordinals can be locked on the first layer of Bitcoin and then traded on the second layer of Stacks, achieving faster, lower-cost, and more flexible transactions.

By using sBTC, more traditional decentralized financial applications can be explored, such as lending - the Zest team has already started relevant development on Stacks. Other token exchange markets based on sBTC will also be launched, with ALEX laying the groundwork for this. These applications not only explore new functionalities but also automatically generate yields, with the potential to gradually capture the market and provide users with an innovative and practical ecosystem.