As Bitcoin's market cap explodes this year, the opportunity only continues to grow for Bitcoin DeFi builders.
Stacks, one of the leading Bitcoin DeFi projects, has made inroads with Bitcoiners as a new way to leverage existing Bitcoin for yield. Stacks co-founder Muneeb Ali joined Coinage to share how the project is continuing to grow exponentially as Bitcoin has taken off this year.
For those unfamiliar, Stacks extends Bitcoin’s utility by making it programmable . As Ali explains, “Bitcoin is simple and durable by design... but that doesn’t mean you cannot deploy Bitcoin capital. You can move your BTC from the layer one [to Layer-2], which is ... faster, cheaper, but more importantly, programmable.” This ability to use Bitcoin in ways traditionally reserved for Ethereum or Solana opens the door to swapping, lending, and yield generation — all using the world's most secure blockchain as a base layer.
This year has been a pivotal year for Stacks, buoyed by its monumental Nakamoto Upgrade. After years of development, the upgrade introduces faster transactions, reduced latency, and enhanced security by tying Stacks’ consensus more deeply to Bitcoin’s. “You get 100% of Bitcoin’s hash power securing the transactions that happen on the Layer-2,” Muneeb noted. By maintaining Bitcoin’s security while dramatically improving usability, the upgrade addresses one of Bitcoin’s long-standing challenges: its slow and clunky user experience.
The Nakamoto Upgrade also paves the way for sBTC, a non-custodial, decentralized Bitcoin-pegged asset. sBTC will enable Bitcoin to flow seamlessly between its Layer-1 and Layer-2 while maintaining a 1:1 backing. “You lock your BTC on the L1 and basically get this asset called sBTC, which is 1-to-1 backed by Bitcoin,” Muneeb said. Scheduled to go live in December, sBTC is set to unlock vast amounts of dormant Bitcoin capital.
This innovation positions Stacks to capitalize on a massive opportunity. Bitcoin, with a market capitalization nearing $2 trillion, has an unparalleled capital base. Yet, as Muneeb highlighted, “Most of the Bitcoin capital is actually not deployed... it’s mostly in cold storage and just sitting there.” Stacks aims to mobilize this capital, creating a thriving Bitcoin economy on its Layer-2 network.
But beyond the Bitcoin DeFi technical advancements, Stacks is building bridges to the broader Web3 ecosystem. Recent partnerships with Aptos and Solana exemplify its strategy of integrating Bitcoin into other blockchain ecosystems. “If Aptos wants to have a Bitcoin asset, they don’t have to redo all the work that Stacks has already done,” Muneeb explained, emphasizing the value of interoperability.
As Bitcoin ETFs bring unprecedented institutional inflows, the timing for Stacks’ growth couldn’t be better. However, Muneeb is clear that the untapped Bitcoin capital itself — less than 1% of which is currently deployed — offers ample opportunity even before institutional players fully participate. The focus, he says, remains on scaling the technology to handle this capital efficiently.
Stacks still has plenty to deliver in 2025: Enhancements to network speed, integrations with major ecosystems, and initiatives to onboard developers are all in progress. Muneeb even teased potential support for Rust, a popular programming language, to attract more developers to the platform.
