A Closer Look at Stacks 2.1: Stacking Improvements
September 20, 2022
In advance of the launch of Stacks 2.1, we will be releasing posts that provide a closer look at each of the key updates for the network. For a quicker breakdown of what’s coming, check out our first post about 2.1 updates. To kick off our deeper dive into the new updates, we’ll be talking more about the upcoming Stacking improvements in this post.

Stacks 2.1 will introduce several improvements to Stacking that will eliminate inefficient or confusing aspects of Stacking, the PoX reward and security mechanism.

Ecosystem builder @codexbtc shares a few thoughts below on the upcoming 2.1 Stacking Improvements.
  • 1
    PoX Sunset Removed
    Originally, PoX was designed to be used as a bootstrapping mechanism but at scale, it would need to stop and the system would be use only Proof of Burn.

    There was a lot of backlash in the community. Mainly, PoX was presented as the differentiator between PoW and PoS consensus mechanism. For many, this was quite disappointing and several people in the community complained about the PoX sunset given that it was the focus point of Stacks marketing.
  • 2
    Continuous Stacking & Increasing lock-ups or "topping off"
    Continuous Stacking makes PoX a lot more efficient and composable. Services such as @ArkadikoFinance that use PoX under the hood will have higher revenue from Stacking and will be more capital efficient.

    Once you can leverage continuous stacking and topping off, they can be used in other protocols and used programmatically.

    A no-brainer example is to build a liquid stacking protocol such as Lido on Ethereum in which you stake your STX and get a liquid nSTX token while you still receive the stacking yield. Then you would be able to swap your STX with nSTX on @ALEXLabBTC probably at a premium.

    Moreover, upon receiving the BTC yield, a contract could react to that, swap the BTC through @magicstx to xBTC, swap with STX and re-stack it. Basically compounding the Stacking yield.

    From a dev perspective, in @Stacks 2.0 implementing PoX in your own protocol is quite complicated because you would need to manage the PoX cycle state as well for all the users. And make sure the PoX continues after the cooldown. Continuous Stacking makes it a lot easier.
What other builders are saying:
Philip De Smedt, Founder, Arkadiko
"Through continuous stacking, we will no longer be exposed to the dreaded cooldown cycle and be able to offer our users higher APYs."
Dan Trevino, Founder, Boom
“With Stacks 2.1, continuous stacking and better support for modern Bitcoin addresses are going to unlock a slew of new opportunities for Bitcoin developers, and inevitably lead to more powerful Bitcoin integration features for users.”
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