As a researcher with a background in blockchain technology and decentralized finance, I find the recent surge in active users on Stacks, a leading Bitcoin layer-2 (L2) network, highly intriguing. The record high of 122,497 active accounts during April is a clear indication of growing interest in Bitcoin-native DeFi, or BTCFi.
As a Bitcoin analysis expert, I’ve noticed an intriguing development in the leading Bitcoin layer-2 (L2) network, Stacks. This network has recently hit a new record high in terms of active users. The surge can be attributed to the escalating curiosity and demand for Bitcoin-centric decentralized finance (DeFi) solutions.
During the month of April, the number of active Bitcoin (BTC) accounts hit an all-time record high of 122,497, as reported in a May 2 update from Bitcoin data provider Signal 21. This figure represents unique addresses that have carried out at least one transaction.
The number of record accounts involving Bitcoin DeFi, or BTCFi, indicates a rising curiosity in this area, and this observation is made following last week’s significant events: the 2024 Bitcoin halving and the launch of Runes, a novel protocol for creating fungible tokens on the Bitcoin blockchain.
According to Andre Serrano, the product and partnership manager at Stacks, the use of Bitcoin Runes and Ordinals could lead to heightened activity on Bitcoin L2 networks. This is because as fees on the Bitcoin network continue to rise, smaller transactions may become unaffordable, thereby pushing more users towards these secondary layers for cost-effective transaction processing.
Serrano told CryptoMoon in an interview:
“There’s going to be a lot of asset issuance on [Bitcoin] L1, which will drive up the transaction fees […] This prices out a lot of users and activity […] Ultimately, pushing more of this activity to L2s will become a necessity.”
The average fee for a Bitcoin transaction dropped to $1.72 on May 1st, marking a significant decrease from its record high of approximately $92, which was observed on April 20th, as reported by CryptoQuant. This decrease can be attributed to the Bitcoin halving that took place around this time.
Bitcoin L2s are critical for the development of Bitcoin DeFi
“Bitcoin Layer 2 solutions like Stacks play a crucial role in BTCFi (Bitcoin Financials Infrastructure), reducing transaction fees and expanding Bitcoin’s functionality as the original blockchain network. For example, the L2 network Stacks facilitates the development of smart contracts on the Bitcoin platform.”
Expert: Serrano from Stacks made it clear that Layer 2 (L2) solutions are more significant for Bitcoin than for Ethereum, due to Bitcoin’s lack of built-in smart contract functionality. He emphasized that L2s are essential for expanding the Bitcoin network’s capacity beyond its present transaction restrictions.
BTCFi garnered significant excitement within the cryptocurrency community. Based on current progressions, BTCFi has the potential to rival the groundbreaking innovations in Ethereum’s Decentralized Finance (DeFi) scene, as suggested by Nash Lee, co-founder of MerlinSwap.
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2024-05-02 15:25