The leading Bitcoin layer-2 (L2) network, Stacks, has achieved a remarkable milestone with its highest number of active users to date. During April, Stacks recorded a new all-time high of 122,497 active accounts, indicating a surge in interest in Bitcoin-native decentralized finance (DeFi). This comes shortly after the 2024 Bitcoin halving and the launch of Runes, a novel protocol for issuing fungible tokens on the Bitcoin network.
The rise in active accounts suggests a growing attraction to Bitcoin DeFi, also known as BTCFi, as Bitcoin users seek alternative avenues for financial activities. Andre Serrano, the product and partnership manager at Stacks, believes that the increasing fees on the Bitcoin network will gradually push smaller transactions towards Bitcoin Layer-2 networks. Serrano emphasized the importance of L2s for Bitcoin, stating that the asset issuance on Bitcoin Layer-1 (L1) would drive up transaction fees, making L2s a necessity to accommodate more users and activity.
Bitcoin L2 networks like Stacks play a crucial role in the development of Bitcoin DeFi. They facilitate lower transaction costs and offer additional use cases for the original blockchain network. Stacks, in particular, enables the creation of smart contracts on the Bitcoin network, expanding the possibilities for Bitcoin’s functionality. L2s are seen as a means to scale the Bitcoin network beyond its existing transaction limitations.
The growing interest in BTCFi has garnered widespread enthusiasm across the cryptocurrency space. With the current pace of development, BTCFi has the potential to match the innovation seen in Ethereum-native DeFi, according to Nash Lee, co-founder of MerlinSwap.