This project is exploding in price and unlocking the full potential of the BTC blockchain with smart contracts and DeFi

by Arthur · March 1, 2023

Stack’s native crypto STX delivered a strong rally in February when it unveiled Bitcoin-based Ordinal NFTs on the blockchain.
Bitcoin-based NFTs are gathering steam with popular players like Yuga Labs joining the bandwagon. Bitcoin investors and developers are protesting this development.

Crypto project Stacks (STX) has recently been in the news for becoming one of the first blockchains to allow the minting of Bitcoin Ordinals. Over the past month, the prospect of enrolling NFTs on the Bitcoin blockchain network has touched a new high.

It all started after Casey Rodarmor entered an Ordinal last month on January 29th. This got an overwhelming response as the trend took off in no time. Currently, the minting of Bitcoin Ordinals is limited to technical users who have a Bitcoin node. In addition, the minting takes place primarily through OTC channels.

However, Ordinals has previously cited a problem with Bitcoin maximalists, claiming that it could lead to network congestion. Also, compared to Ethereum’s NFT marketplaces, the infrastructure for Bitcoin-based NFT marketplaces is very underdeveloped.

The Bitcoin developer community has also advised in the past that using the network for anything other than payments could lead to congestion and ultimately lead to an increase in transaction fees. Despite its robust infrastructure, the Ethereum blockchain faced congestion issues during the crypto bull of 2022 and 2021. This was mainly caused by DeFi and NFTs. On the other hand, Bitcoin fees remained at optimal levels during the bull run.

The report from CoinShare notes that the adoption of Ordinals will be subject to social acceptance of the method of entering additional data on the Bitcoin blockchain. It cites the previous failed attempts to introduce smart contract activity on the Bitcoin blockchain, It notes: “similar projects from Bitcoin’s past have had little impact on both investors and users”.

The Rise in Bitcoin Ordinals and Stacks Price Rise

At the beginning of February last month, the total number of Ordinals on the Bitcoin blockchain increased significantly. But the trend was immediately dampened due to the lack of trading infrastructure with less than 10,000 NFTs subscribed most days.

But amid the hype of Bitcoin NFTs, STX – the original cryptocurrency of Stack’s blockchain – jumped 256% last month. Some players are positive about Stacks and expect it to make Bitcoin Ordinals more accessible to users by hosting marketplaces and facilitating the minting process.

In February 2022, the Stacks Foundation shared an update of the new protocol Stacks 2.1 which seeks to improve the blockchain by adding EVM compatibility and synthetic Bitcoin (sBTC) using a secure bridge. Also, the .BTC name service that resides on top of the Stacks network can generate a lot of trading activity if demand for .BTC addresses peaks.

With the 2.1 upgrade, the Stacks blockchain will allow direct sending of the assets to bitcoin addresses. It will allow proxy access to the Bitcoin blockchain without having to create a separate Stacks address.

But what justifies the STX price rise last month in February? Blockchain activity is still insufficient to justify this price increase, as only 1,000 unique active wallets were engaged with DApps on Stacks last month. Stacks’ NFT marketplace Gamma also failed to attract significant users to the platform. There were less than 100 wallets traded daily in the marketplace.

Gamma supports minting Bitcoin Ordinal NFTs and sending them via stacks. However, it is a major UX problem since it requires a separate address in Stacks wallets that is Ordinals compatible. This led to several users sending the NFTs to the wrong address.

User-friendly Ordinals Support

Developers in the Stacks ecosystem are working to bring user-friendly Ordinals support. They are also experimenting with atomic swaps between Bitcoin NFTs and STX. They plan to develop this functionality into a complete marketplace.

But Stacks has competition lined up since there are other players who want to look at the trend. For example, Ordinex is developing an Ordinals trading platform that will be available to Ethereum users through the MetaMask wallet.

Yuga Labs, creator of the popular Bored Ape Yacht Club, recently unveiled a Bitcoin-based NFT collection TwelveFold that will consist of 300 generative NFT artworks.

Introducing TwelveFold. A limited edition collection of 300 generative pieces, written in satoshis on the Bitcoin blockchain. pic.twitter.com/PjWABKKBr4

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— Yuga Labs (@yugalabs) 27 February 2023

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