Stacks is a cryptocurrency project designed to enhance the Bitcoin blockchain by introducing smart contracts and decentralised applications (dApps) to it. This extends Bitcoin’s functionality without altering its foundational structure.
Stacks operates as a layer-2 blockchain on Bitcoin, leveraging a unique consensus mechanism known as Proof of Transfer (PoX). This involves miners transferring Bitcoin to secure the Stacks network and acquire new STX tokens. Smart contracts on Stacks are crafted with the Clarity programming language, which directly interacts with Bitcoin's state and transactions, ensuring scalability and security through Bitcoin’s hashpower.
Stacks supports a broad range of applications, including decentralised finance (DeFi), non-fungible tokens (NFTs), decentralised autonomous organisations (DAOs), and cross-chain atomic swaps. It is also utilised in various sectors like financial services, digital art, gaming, supply chain management, and identity verification.
Founded in 2013 by Muneeb Ali and Ryan Shea, Stacks began as a project for a computer science Ph.D. at Princeton University. It evolved into a startup with Y-Combinator support in 2014. Key milestones include raising significant funds in token offerings, a rebranding in 2020, and launching Stacks Blockchain 2.0 in 2021 to introduce decentralisation. The project drew substantial investment, including an SEC-qualified offering, and continues to innovate with updates like the Nakamoto upgrade and the introduction of sBTC.