Thinking of Stacking up Stacks? Know All About the Bitcoin L2 Network Hitting ATH In Total Value Locked

Key Insights

• Bitcoin's scalability and lack of smart contracts have spawned the development of Layer 2 solutions like Stacks.

• Stacks leverages Bitcoin's security while enabling smart contracts and DeFi protocols.

• Stacks' TVL recently hit an all-time high of $70.41 million, driven by ALEX.

• The upcoming Nakamoto upgrade promises improved throughput, faster confirmations, and stronger price action on $STX.

• Stacks' price correlates with BTC and could potentially follow it directly, in the coming bull run.

One of the biggest ways by which Bitcoin has been criticized is that it has scalability issues, and cannot be programmed with smart contracts, like Ethereum and nearly every other kind of blockchain network.

While some might argue that the cryptocurrency was created to be that way and that there is no need to change things, others disagree.

The defi landscape is changing, and BTC is missing out on all the lending, staking and NFT action.

This is why l2 networks like Stacks were built.

Bitcoin Powerhouses: Stacks And Alex

Stacks is a layer2 Bitcoin network, meaning that it has the bulletproof security of the BTC network, and also supports smart contracts and defi protocols that allow people to stake, lend, borrow and do much more.

ALEX, a Bitcoin-based DEX, stands as one of the most prominent defi protocols on the Stacks network, allowing users to trade, lend, and borrow crypto assets.

According to DefiLlama, Stacks' TVL has reached an all-time high of $70.41 million as of 14 February 2024.

This stands as the highest point this metric has ever hit since its launch in 2022 and represents more than a 400% increase since 1 October.

ALEX contributed to the growth of STX so far, because it holds about 80% of all the TVL on stacks.

Over the same timeframe, ALEX has amassed $56.48 million locked in its protocol, which stands at nearly a 558% increase.

Interestingly enough, this spike in the TVLs of Stacks and ALEX coincides with the current rally in Bitcoin and other Bitcoin-related cryptocurrencies like ORDI and the BRC-20s.

Should You Bet On STX?

Stacks seem pretty solid from fundamental and technical perspectives.

For example, Stacks is gearing up for a significant network update known as Nakamoto, which co-creator Muneeb Ali says should happen in approximately two months.

Nakamoto aims to improve the protocol in several ways, including boosting transaction throughput, cutting down on confirmation times, and strengthening transaction finality guarantees.

Nakamoto will also coincide with the next Bitcoin halving and will bring several new opportunities for STX (and Bitcoin) to soar higher up in price.

According to the charts, STX appears to have a direct correlation to the price of Bitcoin and is tracking the price of Bitcoin further upwards as we speak.

The cryptocurrency currently trades at $2.36, and may now be aiming for a retest of its all-time high of $3.256 from 1 December, last year.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.