May 24, 2024
Bitcoin News

Bitcoin DeFi Flourishes: Stacks L2 Network Hits Record-High Users

Stacks, a leading Bitcoin layer-2 (L2) network, has achieved a milestone, reaching an all-time high in active users. The surge in active accounts, totaling 122,497 in April, indicates a burgeoning interest in Bitcoin-native decentralized finance (DeFi).

Stacks, active accounts. Source: Signal 21

Rise of Bitcoin DeFi and Introduction of Runes Protocol

The record-breaking account count comes in the wake of the 2024 Bitcoin halving and the launch of Runes, a new protocol facilitating the issuance of fungible tokens on the Bitcoin network.

This development underscores the potential for Bitcoin DeFi, often referred to as BTCFi, to expand its footprint within the crypto ecosystem.

According to Andre Serrano, product and partnership manager at Stacks, the introduction of Bitcoin Runes and Ordinals could further propel activity on Bitcoin L2 networks.

Additionally, with rising Bitcoin network fees, smaller transactions risk being priced out, making L2 solutions increasingly essential.

Critical Role of Bitcoin L2 Networks in DeFi Development

Bitcoin L2 networks like Stacks play a crucial role in advancing BTCFi, offering lower transaction costs and unlocking additional use cases for the pioneering blockchain network.

These networks facilitate smart contract creation on Bitcoin, addressing scalability challenges and expanding the network’s capabilities.

Furthermore, Serrano emphasized the significance of L2 solutions for Bitcoin, particularly in contrast to Ethereum, which already boasts built-in smart contract functionality. He highlighted the necessity of L2s to overcome Bitcoin’s transaction limitations and foster its scalability.

Potential for BTCFi Growth and Innovation

The enthusiasm surrounding BTCFi signals its potential to rival the innovation witnessed in Ethereum-native DeFi. Nash Lee, co-founder of MerlinSwap, expressed optimism about the future of BTCFi. He expressed that continued development of BTCFi could elevate it to the level of Ethereum DeFi.

Image from Wallpapers.com

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