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Bitcoin Layer 2 Stacks Network’s STX Token Spikes 50% as ‘Ordinals’ Boom

Bitcoin Layer 2 Stacks Network's STX Token Spikes 50% as 'Ordinals' Boom

The Ordinals protocol’s implementation of non-fungible tokens (NFTs) and smart contracts on the Bitcoin blockchain has raised STX, the native currency of the Bitcoin layer 2 Stacks Network.

Stacks Network aims

Stacks Network, a Bitcoin layer 2 for smart contracts, promises to establish the world’s largest and oldest programmable blockchain, a characteristic of Ethereum and its competitors such as Solana, which dominate global NFT and DeFi activity.

On Stacks’ blockchain, developers can create applications similar to Ethereum and Solana. STX, the first SEC-qualified token issuance, incentivizes Stacks miners and participants in the proposed Stacks bitcoin (sBTC) system, which aims to programmatically enable bitcoin.

The coin has gained 125% month-to-date after gaining over 50% in the past day to reach $0.60. According to CoinDesk data, prices reached $0.84 on Monday morning, the highest level since May. Bitcoin (BTC) has increased by 6% this month.

Ordinals, which went live on January 21, enables users to integrate references to digital art into Bitcoin blockchain transactions. Ordinals are analogous to paintings on satoshi (sats), the smallest bitcoin denomination, but NFTs on Ethereum are similar to a writer’s authentication certificate.

This week, the direct conversion of 100,000 Ordinals or NFTs into Satoshis on Bitcoin caused network congestion.

Bitcoin NFT fever

Muneeb Ali, the co-founder of Stacks, feels the increased popularity of Ordinals would assist layer 2 solutions.

“Ordinals on Bitcoin L1 are complementary to Bitcoin NFTs on L2s like Stacks. Ordinals have a natural limit on the L1 scale, and L2s provide a clear scalability path,” Ali tweeted. “Wallets like Xverse and & Hiro are amongst the first to release or work on Ordinals.”

The prevalence of Ordinals has increased NFT activity on Stacks. According to DappRadar, the trading volume on Gamma.io, a Stack-based Bitcoin NFT platform, has increased by over 1,000% in the past 30 days. Megapont volumes jumped 125%. Ali disclosed that artists and producers on Stacks had issued 650k Bitcoin NFTs utilizing the layer 2 solution.

CK Cheung, an investment analyst at DeFiance Capital, stated, “Ordinals NFT on Bitcoin blockchain has been very successful, leading to a general Bitcoin NFT fever.  Stacks is a beneficiary of this as it is an L2 supporting smart contracts built on top of the Bitcoin Network. People could mint new Bitcoin NFTs on top of Stacks with a lower cost and higher speed.”

The Bitcoin-centric Web 3 wallet Xverse just implemented Ordinals capability. Ali compared Hiro Wallet’s testnet inscription support to Bitcoin’s Metamask.

This month, http://Gamma.io introduced a no-code creation platform for NFTs on native Bitcoin using ordinals, allowing users to generate inscriptions without a Bitcoin node or code. The launch of Gamma democratized Ordinals.

“Ordinals (inscriptions) are similar to NFTs and are digital assets inscribed on the smallest value of Bitcoin (satoshis). This is now opening up the use case for NFTs and merging them with the Bitcoin network security layer,” according to Markus Thielen, the head of research and strategy at crypto services provider Matrixport “as the primary short-term occurrence.

From February 24 to March 7, participants will use Clarity to develop smart contracts on the Stacks 2.0 network.

“This virtual hackathon is driving a lot of attention as Stacks uses ‘Clarity,’ a programming language for writing smart contracts that might be easier to learn than Solidity. The hackathon will reveal in the next two weeks if everybody can now build smart contracts without too much technical knowledge,” Thielen declared.

Reetika Malik, a crypto analyst, and trader based in Dubai feels that STX is creating a sanctuary bid.

“STX is also one of the rare tokens approved by the SEC. So in these uncertain times when the regulator is going after a lot of crypto companies, an SEC-approved token also sounds like a good thing to the market,” said Malik.

Content Source: coindesk.com

About MahKa

MahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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