Written by: 0xjs @ Jinse Finance
After the completion of the Satoshi upgrade on October 29, 2024, the next major event of community interest is the official launch of sBTC.
Bitcoin L2 Labs, a Stacks entity, recently announced that sBTC is expected to go live on the mainnet on December 16, 2024.
The launch of sBTC is a key milestone for DeFi and Web3 users as they transition towards decentralized, 1:1 Bitcoin-backed assets, unlocking a programmable Bitcoin layer that allows users to bridge BTC into productive applications for generating yields, obtaining on-chain loans, and trading on decentralized exchanges.
Andre Serrano, head of products at Bitcoin L2 Labs, recently published an article outlining the sBTC launch plan.
Below is the sBTC mainnet launch plan, timeline, and incentives.
Launch Phase Overview
Phase 0: Testnet
The testnet phase focuses on rigorously testing the core functionality of sBTC, including deposits and signer operations. This phase ensures that the protocol meets security and performance benchmarks before the mainnet launch. Currently, the sBTC working group is actively recruiting signers and developers to strengthen testing efforts and prepare for a seamless transition to the mainnet.
Status: Completed (November 22, 2024)
Phase 1: Mainnet - Bitcoin Deposits
Phase 1 introduces the functionality for users to deposit BTC and mint sBTC, bridging Bitcoin with DeFi. This mainnet launch will focus on guiding users and providing early access to builders. By starting only with deposits, the protocol limits its operational complexity and allows for rigorous real-world testing of its core components under controlled conditions.
Early depositors will be eligible to participate in the sBTC rewards program, providing incentives for sBTC adoption.
Expected Launch Date: December 16, 2024
Phase 2: Mainnet - Bitcoin Withdrawals
Phase 2 unlocks sBTC withdrawals, allowing users to seamlessly exchange sBTC for BTC. During this phase, the initial deposit cap will gradually increase to attract more users.
Expected Timeline: 6-8 Weeks After Phase 1
Phase 3: Open Signer Set + Optimization
In this phase, the sBTC signer set will be decentralized, moving beyond the initial 15 community-elected signers. The expansion of the signer set will be a gradual process, with the ultimate goal of becoming a fully decentralized, open, and permissionless signer set over time.
Expected Timeline: After Phase 2
In-depth Study of Phase 1
Phase 1 focuses on the deposit functionality of sBTC. This is a mainnet version with a deposit cap, which will provide partners with an important entry period. Users will be able to deposit their BTC into sBTC and qualify for rewards through the sBTC rewards program.
Bitcoin Deposit Cap
This phase will implement a deposit cap of 1,000 BTC for controlled testing, while ongoing security work will continuously strengthen as the protocol expands. As Phase 1 progresses and transitions to Phase 2, this cap will be increased.
The deposit cap will be on a first-come, first-served basis, meaning deposits will be accepted in the order they are received on the Bitcoin blockchain until the cap is reached. Deposits received after reaching the cap will be returned to the user.
Rewards: Bitcoin In, Bitcoin Out
Unlike incentive programs that rely on opaque point systems and offer alternative tokens as rewards, sBTC provides people with what they truly want: Bitcoin. Eligible deposits will earn sBTC rewards and can be used in DeFi without requiring staking, locking, or other token derivatives. The program is designed to keep the user experience simple.
Signers: The Pillars of sBTC
The security and reliability of the sBTC protocol depend on its signer set, which is responsible for managing Bitcoin custody and facilitating deposit and withdrawal operations.
The Stacks community recently approved SIP-028, which defines the criteria for selecting signers based on technical expertise, reliability, performance, and decentralization. In Phase 1, a group of 15 initial institutional signers was selected to maintain simplicity and reduce operational risk. As the protocol matures, this group will expand over time.
As sBTC evolves, the signer set will transition to a fully decentralized model, further enhancing the protocol's resilience.
sBTC Early Incentives: How Users Can Participate
1. Visit the sBTC Dashboard (https://bitcoinismore.org/): This user-friendly interface will guide users through the deposit process and explore applications supporting sBTC. The dashboard is currently in private testing and will be publicly available soon.
2. Connect a Non-Custodial Wallet. Use either Leather or Xverse wallets, both designed for seamless integration with Bitcoin and Stacks users.
3. Deposit BTC. Deposit Bitcoin according to the instructions and receive sBTC in return.
4. Earn Rewards. After deposits are processed, head to the rewards website (https://bitcoinismore.org/) to start earning BTC rewards immediately.
5. Deploy sBTC in DeFi. Access one of the featured sBTC applications to swap, lend, or borrow using on-chain sBTC as collateral.
