$STX is the native token of the Stacks network, which aims to bring smart contracts and decentralized applications (DApps) into the Bitcoin ecosystem. Stacks is unique in that it not only extends the capabilities of Bitcoin, but with the upcoming Nakamoto upgrade, it is expected to further improve its performance and security, bringing it closer to Bitcoin's second layer (L2) Solution.

Technology Upgrade: Satoshi Nakamoto Upgrade

The Nakamoto upgrade is a major technical iteration of the Stacks network and is expected to be completed in the first quarter of 2024. This upgrade will bring the following key improvements:

  • Fast block generation time: shortened from the current 10 minutes to 4-5 seconds, greatly improving transaction processing speed.

  • sBTC support: The introduction of Bitcoin-pegged asset sBTC allows Bitcoin to circulate in the form of tokens on the Stacks network, enhancing interoperability with Bitcoin.

  • Multi-language support: Expanded support for multiple development languages, including Solidity and EVM, enables smart contracts on Ethereum to be seamlessly migrated to the Stacks network.

  • Improved security: By sharing security with Bitcoin, the Stacks network will gain stronger security.

price drivers

The price of STX is affected by a variety of factors, including:

  • Halving Narrative: Bitcoin’s halving event usually triggers volatility in the cryptocurrency market, and as part of the Bitcoin ecosystem, the price of STX may be affected.

  • BTC second-layer narrative: STX is the only circulating Token project in the second-layer BTC. As the attention of Bitcoin second-layer solutions increases, the value of STX may be revalued.

  • Compliance: STX is the first token issuance to obtain U.S. SEC compliance qualifications, which supports its acceptance in traditional financial markets.

  • Ordinals Ecology: The rise of the Ordinals ecology has brought capital and sentiment premiums to the second layer of BTC. STX, as part of this ecology, may benefit from this trend.

market performance

According to Defillama data, as of 2023, the total locked value (TVL) of the Stacks network is 19.13M, showing market recognition of its technology. However, due to the high difficulty of technology development and low market popularity, Stacks' TVL growth is relatively slow.

Investment value analysis

The long-term value of STX depends on the growth of the Stacks ecosystem and demand for Clarity smart contracts. At present, the ecological construction of Stacks is relatively lagging behind, and the number of developers and actual users is growing slowly. However, as the Satoshi upgrade progresses, STX is expected to gain more market attention and potential growth.

in conclusion

As the native token of the Stacks network, STX is expected to significantly improve its performance and security with the implementation of the Satoshi Nakamoto upgrade, making it closer to Bitcoin’s second-layer solution. This upgrade could become a significant catalyst for STX price movement. Investors should pay close attention to the progress of the Satoshi upgrade, market acceptance of BTC’s second-layer solutions, and the dynamics of the overall cryptocurrency market when considering STX as an investment.