Ethereum (ETH) is currently the leader when it comes to smart contract capabilities and the large number of projects operating on its network, but the push to create products on Bitcoin (BTC) is gaining traction with advocates like Square CEO Jack Dorsey leading efforts to bring decentralized finance (DeFi) to the Bitcoin network.
One project to combine DeFi functionality with Bitcoin network security is Stacks (STX), a layer-one blockchain protocol designed to bring smart contracts and decentralized applications (dApps) to the Bitcoin network.
Data Cointelegraph Markets Pro and TradingView shows that since falling to a low of $ 0.50 on June 22, the price of STX has climbed 195% to $ 1.47 on July 11 and now that Bitcoin has shown some bullish momentum, the price of STX increases again with a gain of 10% on July 22.
Three reasons for STX’s recent strength include the release of the programming language Clarity which brought smart contracts to Stacks 2.0 and Bitcoin, the ability for STX holders to wager tokens for BTC rewards and the arrival of DeFi and of non-fungible tokens (NFT) to the Bitcoin Network.
Smart contracts are coming to Bitcoin
The introduction of the Clarity programming language on Stacks has been the main catalyst for the growth of the Stacks ecosystem as it has enabled the creation of smart contracts on the Bitcoin network.
I’ve heard that this Bitcoin smart contract business could be, maybe, a big deal.@Stacks
– muneeb.btc (@muneeb) July 8, 2021
Clarity claims to be a ‘decidable language’, which means that ‘you can know for sure from the code itself what the program is going to do’.
The main difference between Clarity and other smart contract languages is its decidable language, which is not Turning complete, and the language is interpreted and broadcast as is on the blockchain, rather than being compiled, which “ensures that the executed code is human readable and auditable.
The collaboration between the two networks means that popular industries like DeFi and NFT now have a way to operate and be registered on the Bitcoin network without having to worry about slow transactions and rising costs.
STX holders can earn BTC by staking
Stacks recently rolled out STX staking for holders, which allows them to earn BTC as a reward.
The Stacks Network uses a new mining protocol called Proof of Transfer (PoX), which works in parallel with Bitcoin and uses the BTC network as a reliable broadcast medium for its block headers.
While most proof-of-stake networks offer wagering rewards paid in the native token, members of the Stacks community can wager their STX tokens to earn BTC at an average rate of 10%.
This represents one of the few opportunities in the crypto space where a token holder can wager their tokens and earn BTC as a reward.
DeFi and NFT are coming to Bitcoin
On July 10, STX created and sold the very first Bitcoin NFT in the Stacks blockchain.
Historic moment for #Bitcoins
– Jim.btc (@iCrypto_) July 10, 2021
The event was meant to mark the start of a new era of Bitcoin smart contracts, and other bullish news revealed that USD Coin (USDC) would expand into the Stacks Network. This prompted some experts to cite the Bitcoin Law which states that “successful experiences in crypto will eventually come to Bitcoin”.
The arrival of NFT and DeFi capabilities has also introduced new ways to take advantage of these popular sectors to earn a return in BTC, which has the potential to attract new participants.
As a result of these developments, momentum for STX was on the rise in July, as evidenced by an increase in price and 24-hour trading volume.
VORTECS ™ data from Cointelegraph Markets Pro began to detect a bullish outlook for STX on July 19, ahead of the recent price hike.
The VORTECS ™ score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points, including market sentiment, trade volume, recent price movements and activity Twitter.
As shown in the graph above, the VORTECS ™ score for STX climbed into the green on July 19 and peaked at 70 about 34 hours before the price rose 42% over the next two days.
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