Written by: 0xjs@Golden Finance
After the Satoshi upgrade is completed on October 29, 2024, the next major event of community interest will be the official launch of sBTC.
Bitcoin L2 Labs recently announced that sBTC is expected to launch on the mainnet on December 16, 2024.
The launch of sBTC is a key milestone for DeFi and Web3 users moving towards decentralized, 1:1 Bitcoin-backed assets, unlocking a programmable Bitcoin layer that allows users to bridge BTC to productive applications for yield generation, on-chain lending, and trading on decentralized exchanges.
Andre Serrano, head of products at Bitcoin L2 Labs, recently published an article detailing the release plan for sBTC.
Here is the mainnet launch plan, timeline, and incentives for sBTC.
Phase Overview
Phase 0: Testnet
The testnet phase focuses on rigorously testing the core functionalities of sBTC, including deposits and signer operations. This phase ensures the protocol meets security and performance benchmarks before mainnet launch. The sBTC working group is currently 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 introduced the functionality for users to deposit BTC and mint sBTC, connecting Bitcoin with DeFi. This mainnet release will focus on guiding users and providing early access for builders. By starting only from deposits, the protocol limits its operational complexity and allows for rigorous real-world testing of fundamental 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 convert sBTC to BTC. In this phase, the initial deposit limit 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 decentralize, moving beyond the initially elected 15 community 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 the mainnet version with a deposit limit, providing an important entry period for partners. Users will be able to deposit their BTC into sBTC and be eligible for rewards through the sBTC rewards program.
Bitcoin deposit limit
This phase will implement a deposit limit of 1,000 BTC for controlled testing, while ongoing security efforts will be continuously enhanced as the protocol scales. As Phase 1 progresses and transitions to Phase 2, this limit will increase.
The deposit limit will be accepted on a first-come, first-served basis, which means deposits will be accepted based on the order on the Bitcoin blockchain until the limit is reached. Deposits received after the limit is reached will be returned to the users.
Rewards: Bitcoin in, Bitcoin out
Unlike other incentive programs that rely on opaque point systems and offer alternative tokens as rewards, sBTC provides people with what they really want: Bitcoin. Eligible deposits will receive sBTC rewards and can be used in DeFi without 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. An initial group of 15 institutional signers has been selected for Phase 1 to maintain simplicity and reduce operational risks. This group will expand over time as the protocol matures.
As sBTC evolves, the signer set will transition to a fully decentralized model, further enhancing the resilience of the protocol.
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 Leather or Xverse wallet, both designed for seamless integration for Bitcoin and Stacks users.
3. Deposit BTC. Follow the instructions to deposit Bitcoin and receive sBTC in return.
4. Earn rewards. After the deposit is processed, go to the reward site (https://bitcoinismore.org/) to immediately start earning BTC rewards.
5. Deploy sBTC in DeFi. Access one of the featured sBTC applications to exchange, lend, or borrow using on-chain sBTC as collateral.
