Stacks active accounts reach record high amid growing interest in Bitcoin DeFi

    2024.05.02 | exchangesranking | 69onlookers

    Leading Bitcoin layer-2 (L2) network Stacks has reached an all-time high in active users, driven by a growing interest in Bitcoin-native decentralized finance (DeFi).

    Stacks reached a new all-time high of 122,497 active accounts during April. Active accounts are addresses that performed at least one transaction, according to a May 2 X post by Bitcoin (BTC) data provider Signal 21.

    The record account count suggests a growing interest in Bitcoin DeFi — or BTCFi — and comes over a week after the 2024 Bitcoin halving and the launch of Runes, a new protocol for issuing fungible tokens on the Bitcoin network.

    Stacks, active accounts. Source: Signal 21

    Bitcoin Runes and Ordinals could drive more activity to Bitcoin L2 networks, as increasing Bitcoin network fees will price out smaller transactions, according to Andre Serrano, product and partnership manager at Stacks.

    Serrano told Cointelegraph in an interview:

    “There’s going to be a lot of asset issuance on [Bitcoin] L1, which will drive up the transaction fees […] This prices out a lot of users and activity […] Ultimately, pushing more of this activity to L2s will become a necessity.”

    Median Bitcoin transaction fees fell to $1.72 on May 1, down from their all-time high of over $92 reached on April 20, due to the Bitcoin halving, according to CryptoQuant.

    Bitcoin median fees per transaction, Source: CryptoQuant

    Related: ‘Real opportunity’ for Bitcoin Runes will come after first wave of investor hype

    Bitcoin L2s are critical for the development of Bitcoin DeFi

    Bitcoin L2s like Stacks are a significant element of BTCFi, enabling lower transaction costs and additional use cases for the world’s first blockchain network. For instance, L2 network Stacks enable the creation of smart contracts on the Bitcoin network.

    Stacks’ Serrano explained that L2s for Bitcoin are more important than for Ethereum, which already comes with inherent smart contract capabilities. He added that L2s are necessary to scale the Bitcoin network beyond its current transaction limitations.

    Andre Serrano interview with Cointelegraph. Source: Cointelegraph

    BTCFi received widespread enthusiasm across the crypto space. With the current development, BTCFi could grow to match the innovation on Ethereum-native DeFi according to Nash Lee, co-founder of MerlinSwap.

    Related: Runes are offering a significant lifeline for Bitcoin miners — TeraWulf COO

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