The Stacks (STX) Ecosystem: An Investment Case For Monkey JPEGs

Updated: 2 days ago



In this article, I want to present one of my favourite crypto projects: Stacks. It's a smart contract blockchain using Bitcoin as settlement layer: in other words, it's a programmatic protocol using Bitcoin as the source of truth. I will introduce you to the project, go though a myriad of use cases and finally demo a very handy tool to explore the network.



1. Stacks: smart contracts secured by Bitcoin


The history of cryptocurrency starts with this idea of "P2P cash" that led to the whitepaper of Bitcoin in 2009. The narrative quickly moved to "digital store of value" because of the level of decentralization and security of Bitcoin. The idea of Stacks is to use that store of value (yellow) as the core to build a new layer (in blue) and use the Bitcoin block validation to settle its smart contracts:




This technology is called Proof of Transfer (POX):


It's a ping-pong between the BTC ledger and the Stacks ledger, like a dance for validation of transactions and staking operations.




2. Create BTC with STX: stake your Stacks


One of the first use cases of Stacks is to stake STX to get BTC as reward:


Give it a try here.

3. Buy historic NFTs secured by Bitcoin


Yes, you can buy NFTs with Stacks and it's actually everything I own. Look at these cuties:


At time of writing, you can find Stacks NFTs on 3 main exchanges: Stackart, Byzantion and STXNFT.

The most famous and valued one is called Megapont. Muneeb, the founder of Stacks is regularly buying some and tweeting about it:




My rule of thumb about NFTs is that if it's programmatic and a monkey: it will work.

More generally, it's safe to assume that: Price = alpha* [is_it_an_animal + (1+is_it_programmatically_generated)^scarcity]

You can adapt alpha the way you like.


4. Stake NFTs like Bitcoin Monkeys


Yes, you've read me correctly. It will be possible to stake Bitcoin Monkeys (a Stacks NFT) to earn Bananas that you will be able to trade:



Yum yum!

5. Read Stacks smart contracts to learn how they work


ETH smart contracts are opaque and compiled. With Stacks you can read them on the transaction page. In other words:


Each transaction is accessible on the Stacks explorer and you can read the smart contract code:



This is +200 points for me. The documentation of Stacks for developers is also amazing.


6. An impressive community of developers


Developers love Stacks because it's open and because the language (Clarity), the concepts and the documentation are great. In comparison to other projects, Stacks is ahead of the game in terms of number of developers:




7. Great tools to explore the data


We're data-driven here at Stockomatics and I was so pleased when I've discovered this interactive dashboard called "Stacks on Chain":




It gives great insights when you're investing in NFTs. What's very cool is that you can build your own SQL queries to analyse the network the way you want:



7. Conclusion


Stacks is an amazing ecosystem with a vibrant community on Twitter and Discord. The use cases, the tooling, the art, the philosophy are all based on the idea that using Bitcoin to settle things is the most secure thing to do. People