Bitcoin's scripting language is intentionally limited, so you can't deploy a lending market or a DAO on it directly. Stacks is a separate chain that runs smart contracts and anchors itself to Bitcoin: its blocks are tied to Bitcoin blocks, its contracts can read Bitcoin state, and its consensus pays out in BTC. sBTC adds the missing piece, a way to move BTC itself into those contracts.
Proof of Transfer
Stacks uses Proof of Transfer (PoX). Instead of burning energy (proof of work) or only staking the native token, Stacks miners spend BTC to compete for the right to produce Stacks blocks. Each miner commits BTC in a Bitcoin transaction, and a winner is chosen with probability proportional to its commitment.
That BTC isn't burned. It's paid to stackers: STX holders who lock their tokens for one or more reward cycles and give a Bitcoin address to receive rewards.
| Role | Puts in | Gets |
|---|---|---|
| Miner | BTC, on Bitcoin | Newly minted STX and transaction fees |
| Stacker | Locked STX | BTC from miners' commitments |
| Signer | Runs signing software, backed by stacked STX | A role in validating blocks (see Nakamoto below) |
Stacking
A reward cycle lasts 2,100 Bitcoin blocks, about two weeks. To stack solo you need at least the current minimum, which changes with how much STX is participating, and you must run or work with a signer. Most holders instead delegate to a pool, which combines smaller amounts and passes on BTC rewards, or use liquid stacking tokens that stay transferable while the underlying STX is locked.
Rewards depend on how much BTC miners commit, which follows the STX price and competition between miners. Stacking yield isn't a fixed rate.
Nakamoto: faster blocks, Bitcoin finality
Before the Nakamoto upgrade (activated on mainnet in late 2024), Stacks produced roughly one block per Bitcoin block, about every ten minutes, and Stacks could fork independently of Bitcoin.
Nakamoto changed both:
- The miner that wins a Bitcoin block's sortition gets a and produces many fast Stacks blocks until the next Bitcoin block. Blocks now arrive every few seconds.