Stacks is unique among Bitcoin layers due to its independent token, STX, which incentivises block production and network maintenance, distinct from Bitcoin’s primary chain. This token model addresses the need for incentivised validation while maintaining Bitcoin’s simplicity at the base layer. Additionally, Stacks differs from other Bitcoin scalability solutions like the Lightning Network, as it maintains a permanent state, essential for running applications that require data consistency, such as smart contracts, in contrast to Lightning’s transaction-focused, ephemeral design.
Another crucial function of Stacks is to make Bitcoin a productive asset in Decentralised Finance (DeFi) without relying on third-party custodians or asset wrapping on non-Bitcoin chains. By anchoring to Bitcoin’s security and using a token-based incentive structure, Stacks allows for applications that enhance Bitcoin’s utility, expanding its role from a store of value to a base for decentralised financial products. This setup facilitates innovation on Bitcoin’s network without introducing the complexity and security risks of adding programmability directly to Bitcoin’s core protocol.
Stacks is building a scalable ecosystem that leverages Bitcoin as a decentralised monetary base, envisioning a future where financial applications and software are anchored to Bitcoin’s security. With this layered approach, Bitcoin retains its original simplicity, while Stacks brings in advanced programmability, making Bitcoin the foundation for a wider range of decentralised applications and financial services.
What is the STX Token?
The STX token plays a central role in the Stacks ecosystem, providing incentives and resources for network participants to secure and grow the layer-2 platform. Unlike Bitcoin, which is solely a store of value and a decentralised currency, STX is designed to support Stacks’ unique functionalities and economic incentives. This includes securing the network through a mechanism called Proof of Transfer (PoX), where STX holders can “stack” their tokens to earn Bitcoin rewards. By committing STX, participants help maintain the integrity of the Stacks blockchain and indirectly support Bitcoin’s layer-2 ecosystem, blending Bitcoin’s security model with new economic incentives for developers and users.
The PoX mechanism is one of the innovative ways STX enhances the Stacks network’s functionality by aligning incentives between the two networks. Through PoX, STX holders participate in a consensus process that leverages Bitcoin’s Proof-of-Work security while operating as a separate chain. This not only strengthens Stacks’ decentralised framework but also enables the network to reward STX holders in Bitcoin, thereby fostering a tighter economic bond between Bitcoin and Stacks. This structure encourages active participation in securing the network without the need for traditional Proof-of-Work mining, which would otherwise strain resources and add complexity.
STX also facilitates the ecosystem’s growth by providing the primary fuel for executing transactions and deploying smart contracts on Stacks. Each time users interact with dApps or initiate smart contract operations on the network, STX is used to cover transaction fees, ensuring that the network remains operational and secure. By assigning a cost to transaction processing, the ecosystem discourages spam transactions and incentivizes efficient usage, much like Ethereum’s use of ETH for gas fees. This makes STX integral to the network’s functionality and utility, supporting Stacks’ broader goal of scaling Bitcoin’s use cases without compromising its foundational security and decentralisation.
STX encourages a broader developer and user community by providing staking and investment opportunities. Through its economic design, developers are incentivized to build applications, as STX rewards help offset the costs and efforts associated with deployment on the platform. For investors and ecosystem participants, STX offers a way to participate in the growth of Bitcoin’s layer-2 expansion, creating economic value tied to the network’s success. By using STX as a tool for both infrastructure support and economic growth, the Stacks ecosystem positions itself as a flexible, Bitcoin-powered environment for decentralised innovation.
STX Tokenomics
The Stacks STX token was launched in 2021 with a genesis block creating an initial supply of 1.32 billion tokens, strategically distributed to foster ecosystem growth and development. Of this initial distribution, 32% was allocated through a 2017 token sale, while the remaining tokens were directed toward the Stacks ecosystem fund (28%), Hiro PBC (25%), and the Stacks Foundation (15%). This allocation strategy was structured to ensure balanced funding for development, community initiatives, and operational costs, supporting long-term ecosystem sustainability.
New STX tokens are minted in each block, primarily as rewards for miners and stackers, with an annual inflation rate initially set at 10% and scheduled to decrease by 0.5% per year until reaching a stable rate of 2.5%. This gradual inflation reduction aligns with the aim of rewarding early adopters while preserving a controlled token supply for the future. Over a 20-year period, this system will lead to a final STX supply of approximately 2.04 billion, providing a predictable tokenomics structure to incentivize network participation and support a sustainable token ecosystem.
How to buy STX with crypto
1. Log in to your Bitfinex account or sign up to create one.
2. Go to the Deposit page.
3. In the Cryptocurrencies section, choose the crypto you plan to buy STX with and generate a deposit address on the Exchange wallet.
4. Send the crypto to the generated deposit address.
5. Once the funds arrive in your wallet, you can trade them for STX. Learn how to trade on Bitfinex here.
How to buy STX with fiat
1. Log in to your Bitfinex account or sign up to create one.
2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.
3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.
4. Check your Bitfinex registered email for the wire details.
5. Send the funds.
6. Once the funds arrive in your wallet, you can use them to buy STX.
Also, we have Bitfinex on mobile, so you can easily buy STX currency while on-the-go.
[ AppStore] [ Google Play]
STX Community Channels
Website | X (Twitter) | Discord | Telegram
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