DEFI ON BTC MADE POSSIBLE BY STACKS 2.0

INTRODUCTION

It is no longer news that Bitcoin is the king of all cryptocurrencies and Blockchain, the dominance of Bitcoin in the blockchain industry for the past decade cannot be questioned, it has defied all odds to become recognized as one of the most secure blockchains available today, and indeed one of the most valuable assets of our time. Despite all this, one of the issues developers have is building decentralized applications (DApps) and deploying smart contracts on bitcoin, this is because of bitcoin’s limited scripting language. This has made many developers build their own blockchains to bootstrap native proof-of-work protocols or proof-of-stake consensus leaving us with a large and ever-growing number of insecure and unstable blockchains.

DEFI ON BTC

When it comes to smart contracts, Ethereum is believed by many developers to be the better option for deployment of smart contracts and building of DApps, this is evidently seen in the large number of smart contracts and DApps deployed on the Ethereum network. The question to ask is; does it make more sense to create Bitcoin on top of Ethereum or to create Ethereum functionality on top of Bitcoin, the answer to this is very obvious; with Bitcoin having the functionalities of Ethereum we don’t have to trade off convenience for security but instead build web applications and deploy smart contracts in a way that uses Bitcoin as a reserve currency along with its blockchain as a security mechanism. This is the possibility that Stacks 2.0 is unlocking using the Proof-of-transfer (POX) and Clarity smart contract language.

Stacks 2.0 will enable developers to build DApps and deploy smart contracts on Stacks Blockchain, unlocking innovation, value, and a new way to earn BTC in a way we’ve never seen before using Proof-of-transfer and Clarity smart contract language. The proof-of-transfer consensus will leverage on bitcoin to enable both miners who release their bitcoin to the network and stackers of STX to earn without the need for an entirely new blockchain that is independent of Bitcoin.

If you’ve not heard of smart contracts before now, know that this is a feature that allows developers to encode essential business logic, or applications on a blockchain. These smart contracts are executed in an open, verifiable, and secure way with no need for trusted third parties, a common example of the application of smart contracts, is the numerous DeFi protocols available today that allows lending, borrowing, staking etc.. without the need of third parties. Stacks 2.0 will Bring DeFi on Bitcoin with the Clarity Smart contract language which was built with the WYSIWYG (what you see is what you get) approach, which makes it easier for developers to reason about smart contract behavior, cost, and performance, in other words this language helps smart contracts optimize for predictability and security. There are a lot of common smart contract vulnerabilities that have been identified such as reentrancy, access control, overflow and underflow, unchecked return values for low Level Calls, denial of service, bad randomness, time manipulation, Short address attack and many more. The clarity smart contract language was built with the prevention of these vulnerabilities in mind and has some notable features;

Clarity is a decidable language, which means that by looking at the code you can know exactly what the program will do.

Clarity is intentionally Turing incomplete as it avoids ‘Turing complexity’ experienced in solidity language being used for smart contracts on Ethereum

Clarity is an interpreted language, this means that the contract source code is published and executed by blockchain nodes without any need for compilation. With this feature, compiler bugs are not to be worried about with clarity language.

Here’s a Clarity smart contract side-by-side with a contract written in Solidity for Ethereum:

SUMMARY

The proof-of-Transfer consensus together with the Clarity smart contract language being built by Blockstacks in Stack 2.0, is ushering the world into a new phase of DeFi on BTC, where reliable and predictable Smart contracts and decentralized applications (DApps) can be built and deployed, while leveraging on the advanced security of bitcoin without trading convenience and Stability for security, and bringing in many more possibilities within the Blockchain Industry as We’ve never seen before.

USEFUL LINKS

Introducing to Proof-of-transfer and stacking

Bitcoin Is a Better DeFi Solution Than Most Think

Full Proof-of-Transfer with STX Mining and Stacking on the Stacks 2.0 Testnet

Bringing ‘Clarity’ to 8 Dangerous Smart Contract Vulnerabilities

Introducing Clarity, a language for predictable smart contracts