The need for fast, consistent transactions is table stakes for any top ecosystem. Both speed and throughput are critical areas of research and development that will see an increased focus for core contributors as the ecosystem scales, building off progress since the release of Nakamoto and sBTC.

What Core Developers are working toward:

• Short-term: Achieve consistent <10s transaction times through ongoing network optimizations, block replication between Stackers, and read/write constraints.
• Long-term: Stacks will become the fastest Bitcoin L2 on the market, putting it in line with speeds on other top ecosystems — all while prioritizing robustness, decentralization, and overall security with 100% Bitcoin hashpower. Active R&D on further performance increases is underway — future designs and their timelines will be informed by the needs of builders.

Core developers are working a new version of Clarity and the ability to compile to Wasm, aiming to remove technical debt and lay the groundwork for future improvements. The Wasm compiler is expected in Q3 2025 and is expected to provide benefits and improvements to transaction throughput, smart contract efficiency, app performance, as well as lay a foundation for additional runtimes.

Work is also going on to make Clarity easier to work with and enable better Bitcoin integration, among other improvements. A longer formal proposal covering Clarity work is expected in June 2025.

There are several major improvements on the horizon for Stacking. Contributors and key ecosystem partners are evaluating how to simplify Proof-of-Transfer and Stacking to make a simpler, higher yield experience for both individuals and pool operators.

Stacking improvements for users:

• Allow any holder to delegate directly to a signer and automatically be pooled, reducing the number of transactions pools need to make each cycle.
• Stacking would automatically renew each cycle until manually halted, removing the need to choose a time period up front or run stack-extend.
• Current one-cycle “cool down” period would be removed, allowing Stackers to freely switch between pools or stacking methods without any financial penalty.

Builders requested adding a feature to the default Miner binary to have the miner replay transactions that were orphaned by a Bitcoin reorg to be included within the next tenure. This replay feature is fully designed and actively under development. The mechanism is now is implementation stages.

PoX is a key differentiator for Stacks, so the consensus mechanism is something Core Developers are always open to improving or adjusting to best enable use cases on top of Stacks. While there is not current design proposal, work going into some of the Stacking improvements above could result in the need for an upgraded version of PoX nicknamed PoX 5.

The ability to withdraw BTC from sBTC was the most urgent unlock for downstream integrations, listings, and further growth. It was enabled as part of sBTC's phased rollout on April 30, 2025.

A key unlock for sBTC adoption lies in onboarding institutional users who hold large portions of latent Bitcoin capital. Stacks is uniquely positioned to serve this audience due to its long track record, performance, brand value, and strong institutional relationships. Builders will benefit greatly from the influx of institutional capital, but many institutional investors who are eager to access Bitcoin DeFi on Stacks are unable to participate on-chain due to compliance and fiduciary constraints. They require qualified custodians not just for the sBTC, but also for their underlying BTC that was pegged in. Enabling institutions to deploy BTC capital in the Stacks ecosystem will be a top focus for Bitcoin L2 Labs in Q2 2025.

Several custody providers have already been onboarded to support sBTC (BitGo, Hex Trust, Copper, ForDeFi) and additional work is being done to ensure capital can be deployed directly from qualified custodians.

Due to its unique architecture, Stacks is positioned to attract millions of users and significant BTC capital by enabling a superior user experience, low-cost transactions, and native Bitcoin yield opportunities.

To ensure long-term sustainability, builders and product leaders agree that as adoption accelerates, value accrual mechanisms should evolve in parallel. Growth in usage must directly benefit the Stacks network, its ecosystem participants, and the STX asset to keep incentives aligned and support continued expansion.

It is crucial to remain at the cutting edge of protecting the underlying Bitcoin capital as we push forward new use cases for deploying more and more BTC on Stacks.

Core developers have been exploring how sBTC can be upgraded to be fully self-custodial, combining unique aspects of Stacks with design breakthroughs that would further reduce the trust assumptions of the protocol. These designs would enable users to retain unilateral control over their underlying BTC while also providing better trust-minimization guarantees for the underlying BTC on the L1.

Details on these updates are coming out shortly as a litepaper. These upgrades go hand-in-hand with the focus on value accrual to STX as they can enable more BTC capital to be trustlessly deployed and used on Stacks.

In progress:

• Qualified custody support (more above)
• Self-custody: Much of the current research involves methods to remove the core custodial risk that underpins nearly every wrapped BTC model in existence today. Unlike systems where a federation or signer group intermediary holds Bitcoin, a fully trustless model maintains the underlying BTC in self-custody, wherein the user can unilaterally withdraw their sBTC to BTC. There is already a design proposal for such sBTC upgrades for when sBTC is held in L2 wallets of the user and used in L2 payments. For details, see the upcoming litepaper.
• “Bitcoin Post-Conditions” build in the same direction, looking into designs that allow users and developers to combine the programmability of the L1 and the Stacks L2 for an effect that meshes self-custody with DeFi utility. For example, a user would be able to define conditions under which the underlying Bitcoin on the L1 is allowed to move, much like post conditions at the Stacks layer, but for the L1. This means that even if a smart contract behaves unexpectedly or is compromised, the BTC will remain safe as the conditions defined at the L1 were not met.

Areas of Exploration:
Outside of the above-mentioned areas like self-custodial sBTC and Bitcoin post-conditions there are a few areas that core developers are doing some exploration. These include:

• BitVM: Core contributors remain aware of BitVM’s progression and will explore possible implementations for Stacks should it present a faster path to market than other paths currently under exploration.
• Data Availability: Stacks currently only stores hashes of L2 data on the Bitcoin L1 and not full data. With advancements in ZK and other proofs, it remains an open area of exploration if Bitcoin L1 can be used as a full Data Availability (DA) layer for Stacks. With full data availability on Bitcoin, anyone can independently verify Stacks blocks and reconstruct the state of the L2. Such approaches can have some negative impacts on speed and currently core developers are optimizing for L2 speed over other things, but continue to monitor progress for Bitcoin DA use.

Many of the updates for sBTC and Stacks covered above are interrelated and interdependent. As such, some core contributors have collectively dubbed them the 'Satoshi Upgrades'. These are upgrades to both Stacks and sBTC will ensure Stacks remains the leading Bitcoin L2 with sBTC becoming entrenched as the most secure programmable Bitcoin asset. Designs include paths to increased security, liquidity, TVL, and user growth, while enabling new use cases alongside ever-improving trust assumptions for the underlying BTC.

All versions of Stacks' future depend on healthy Stacks DeFi. Builders and core contributors are collaborating on a builder-led DeFi growth plan that has already helped Stacks achieve a TVL high in April. Efforts have resulted in over $20mm+ deployed into strategic DeFi apps in the past 3 months.
Stacks is on a path for $1B in TVL in DeFi. Efforts are underway to reach $250mm by the end of Q2 2025, including:

• LP Incentives
• Incentives for larger institutional
• Incentives for Builders to grow their protocols
• TGE readiness for the ecosystem
• SIP 010 Asset support on exchanges
• Onboarding an on-chain Market Maker
• Stablecoin liquidity in Stacks apps

sBTC TVL (Cap 3 & Beyond)
Work has been underway on efforts to bring in sBTC since the end of 2024, notably resulting in the previous two caps being filled. Contributors have also helped enable the flow of sBTC into Stacks apps by developing and facilitating relationships with sBTC holders. sBTC minters include major players in the space such as Jump, UTXO, SNZ, and more.

The next milestone is Cap 3, allowing another 2,000 BTC into the protocol, before opening the system fully. The Stacks Asia Foundation has partnered with Taptive, SNZ, LunarCrush, and others to push forward sBTC TVL growth as part of an inter-ecosystem initiative targeting the first 21,000 sBTC.

With sBTC withdrawal functionality live, only lifting the cap remains a blocker to centralized exchange listings for sBTC. Contributors are working to leverage the interest in sBTC to potentially ease listings for Stacks builders with listable tokens, given sBTC utilizes the SIP-010 standard. As sBTC is listed, Stacks teams with tokens should work to present a compelling case to exchanges to secure listings or launch TGEs.

Interoperability is key for sBTC to improve liquidity and allows users and developers from other chains to access Stacks-based apps and assets, expanding the potential user base far beyond the native ecosystem. For Stacks, this means greater relevance, network effects, and long-term value capture.
Stacks will integrate with:

• Axelar (expected in Q3)
• Additional yet to be disclosed Tier-1 bridge (expected in Q3)

The protocol hopes to create standardizations for Zonefiles so more wallet address types, social links, and other metadata resolve in the same Zonefile by the DNS. This will accelerate BNS integrations across a variety of partners (wallets, exchanges).

Tier 1 stablecoin availability and liquidity are a key unlock for Stacks DeFi. The ecosystem is currently rallied around a bridged USDC asset and a Bitcoin-backed stablecoin asset (USDh) to show momentum in DeFi growth. We’re in the implementation stages with a Tier 1 for canonical deployment.

Additional wallet integrations offer a clear path to Stacks user growth. There are discussions with several large players that can be accelerated with further capital. Further, a deal is being finalized with one of the industry's leading wallet platforms, funded by the Stacks Foundation. The protocol serves tens of millions of users - an announcement is expected in early June 2025.

A proposal covering additional resources for a global Stacks marketing function, further builder grants, DeFi and user incentives, and other growth efforts is expected before June 1, 2025. Ongoing programs from the Stacks Foundation remain, while the Marketing WG is currently organizing builder growth campaigns with many of the leading teams in the ecosystem.