What is Stacks (STX) and how does it work with Bitcoin?

Stacks is a blockchain built to bring smart contracts and apps to Bitcoin. It runs alongside Bitcoin rather than inside it, records a fingerprint of each of its blocks on the Bitcoin chain, and uses BTC in its own consensus. Its native token is STX. The project's founder is Muneeb Ali.

How does proof of transfer work?

Most blockchains use either proof of work or proof of stake. Stacks uses proof of transfer, or PoX:

1. Miners commit BTC. To compete for the next Stacks block, a miner sends a bitcoin transaction. A random draw picks the winner, weighted by how much BTC each miner committed.
2. The winner is paid in STX. The winning miner writes the block and earns newly created STX plus fees, and a hash of the block is recorded on Bitcoin.
3. Stackers receive the BTC. The BTC that miners commit goes to STX holders who have locked their tokens, in proportion to how much they locked. It is paid as real bitcoin to addresses they control.

Stacking runs in cycles of about two weeks. The minimum to stack alone changes with network conditions, so smaller holders often join pools.

Is Stacks a Bitcoin layer?

Stacks is often described as a Bitcoin layer 2, though it has its own token, miners and rules. The Nakamoto upgrade, which began activating in August 2024, made this link tighter. Stacks blocks now arrive in seconds instead of once per Bitcoin block, and the project says reversing a confirmed Stacks transaction is at least as hard as reversing a Bitcoin one. Stackers also act as signers who must approve each block.

What is sBTC?

sBTC lets bitcoin itself be used in Stacks apps. A user sends BTC to an address controlled by the sBTC signers, and receives the same amount of sBTC on Stacks, usually after about three Bitcoin blocks. Turning sBTC back into BTC takes about six blocks.

The pegged BTC sits in a single multisig address controlled by an initial set of 15 community-chosen signers. That differs from wrapped bitcoin, which relies on a custodian company, but users still depend on those signers. About 2,949 BTC had been converted to sBTC by the end of June 2026.

What is STX used for and who runs Stacks?

STX pays transaction fees, rewards miners and can be locked for stacking. In late July 2026 a hard fork called PoX-5 laid the groundwork for "Bitcoin staking," in which holders pair locked BTC with STX to earn BTC rewards without moving their BTC off Bitcoin. Its first product, the Genesis Bond, opened to institutional and whitelisted participants on September 10, 2026.

Development is led by Stacks Labs, with funding from the Stacks Endowment, which reported holding 112 million STX in long-term holdings in mid-2026. Network rules change through hard forks that node operators adopt.