Stacks will launch its Bitcoin-pegged asset SBTC (https://sbtc.tech) at halving (<55 blocks from the moment of writing). Finally, a decentralized BTC peg for something that calls itself a Bitcoin L2.
But!
SBTC may not exceed 60% of stacked STX otherwise the stakers might throw away their STX and run with the Bitcoin. Let's assume that this doesn't actually happen. There's still a problem: STX has an issuance cap so the entire security budget has to come from fees at some point.
Let M be the STX market cap and S be the ratio of staked STX. I don't know what S is, let's assume about 20%. Without SBTC the freely circulating, fee-generating capital is (1 - S)M which is about 0.8M. The new SBTC capital may not exceed 0.6SM, therefore with SBTC the total freely circulating capital will be (1-0.4S)M which is about 0.92M. So the fee-generating capital increases by 15%... cool but STX is dead anyway once its coin supply dries out, there's no incentive for the stakers if the fees are low.
The fundamental shitcoin incentive mechanism (stake SHIT to earn more SHIT) is economically unsound and requires additional incentives. In this case, SBTC fails to provide one because of how it's capped.
STX is a fucking scam!
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Yeah, I have to agree. I don't believe however that there's some cosmic law that prevents a shitcoin-assisted decentralized peg from existing. I just think this is not it.
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110 sats \ 0 replies \ @flat24 19 Apr
good luck to the executors, but in my opinion, I don't give my btc for shit
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Giving me major Luna/UST vibes
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There is some similarity but I want to explain the major difference here:
  • 1 UST is a claim on 1 USD worth of LUNA
  • 1 DAI is a claim on $0.50 USDC and $0.50 worth of ETH
  • 1 SBTC is a claim on 1 BTC locked by the STX validators but there is also >1 BTC worth of STX lying around that 1 SBTC is not a claim on.
Bottom line is that SBTC is very capital inefficient as >2 BTC of value must be locked to produce 1 SBTC. But it can't depeg in the same way that UST did. (Maybe in some other way.)
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Sounds like another ghost
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10 sats \ 0 replies \ @nym 19 Apr
Don’t fall for it! Stick with BTC.
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