Stacks Upgrade PoX-5 Activates, Enabling Bitcoin-Denominated Yield

Stacks (STX) is a Bitcoin layer that adds smart contracts to the cryptocurrency without modifying its underlying protocol. This allows for the creation of programmable logic on top of Bitcoin, which is not possible natively due to its intentionally limited scripting language.

The native token, STX, pays for transactions and can be locked to earn rewards in Bitcoin through a consensus design called Proof of Transfer (PoX). PoX-5, a recent upgrade, enables the creation of 'Bitcoin Bonds' that allow eligible participants to pair BTC held on Bitcoin L1 with STX on Stacks and earn yield denominated in BTC.

STX's supply is not capped, but its emission curve is aligned with Bitcoin's halving cadence, which means that the block reward will decrease over time. This disinflationary token has a market cap of around $500 million and ranks 107 to 118 depending on the feed used.