According to a recent report, the first trust-less swap between the Bitcoin blockchain and Stacks protocol has been executed. The co-founder of the Stacks protocol, Muneeb Ali tweeted about the native bitcoin swap and said the progress is a big deal.
Trust-less Native Bitcoin Swap Executed With an NFT Called ‘Boombox’
On July 23, a trust-less swap using the Stacks protocol and the Bitcoin (BTC) blockchain was settled onchain. The swap dubbed the “Catamaran Swap between BTC and STX” was discussed on the Reddit forum r/stacks.
“The first trustless swap between [the] Bitcoin [blockchain] and Stacks chain is happening,” a user wrote on the forum. “It is similar to a submarine swap. However, I would call it catamaran swap because we have two chains on top of the water,” the individual added. Further into the Reddit thread, the individual notes that the swap was “successfully completed.”
People can see the swap conditions as defined on the Stacks chain and then the bitcoin transfer and the verification. According to the description, the asset swapped was a non-fungible token (NFT) asset called “Boombox (b-12).” The creator of the Reddit post wrote that the “swap demonstrates that you can trigger trustless actions like asset transfers by sending bitcoins from one address to another.”
The individual added that the feature gives Bitcoin a “new dimension” because “transfers can be inspected and validated by smart contracts on the Stacks blockchain.”
The Stacks project is considered a Layer-1 blockchain that leverages the Bitcoin (BTC) blockchain as the base layer. Validation is provided by proof-of-transfer between both networks and similar to Ethereum’s Solidity programming language, Stacks has a programming language called Clarity. The co-founder of Stacks, Muneeb Ali, tweeted about the milestone on Monday, as he wholeheartedly believes it’s a watershed moment.
“Users can do trustless BTC swaps to stablecoins, derivatives, perpetuals, and other crypto assets,” Ali stressed in his Tweet. “All by pure bitcoin transactions on the main BTC chain. Users can purchase any digital assets (like NFTs and decentralized domains).” Ali further remarked that it was a big deal and stated: “Bitcoin has established itself as digital gold, but you can’t use BTC to trade without going through: (a) centralized exchanges or (b) alt blockchains w/ wrapped [bitcoin]. Not anymore.”
Muneeb Ali Says Trust-less Swaps Are a ‘Big Deal,’ Automated Market Maker ALEX Revealed
The computer scientist and Stacks co-founder said that wrapped bitcoin is “not bitcoin” and said that many bitcoiners don’t trust the network models that house these crypto assets. As far as centralized exchange (cex) platforms, Ali mentions that there’s counterparty risk involved and users need to pass KYC requirements. “All that changes now,” Ali said.
“Stacks is a unique L1 blockchain that enables cross-chain transactions with Bitcoin: smart contracts that work with pure bitcoin transactions. Using Stacks, developers have built trustless swaps with native BTC,” the Stacks executive detailed.
Ali also said that usd coin (USDC) will soon be supported and that “trust-less BTC/USDC swaps can be possible.” He added that Ethereum features are possible directly on Bitcoin, and users can create “Uniswap-like AMMs (Automated Market Makers) built around native BTC swaps, [and] do pure BTC transactions to interact.” Moreover, Ali highlighted that these features will come with the robust security of the BTC blockchain. The Stacks executive’s tweetstorm continued:
Bitcoin is sovereign money. An entire open financial world will be created around Bitcoin. Native BTC swaps to new assets are a foundational building block of Bitcoin defi. Bitcoin eating the banks.
Of course, a few people mentioned to Ali that the project Thorchain has been doing trust-less swaps for quite some time now. In fact, the popular peer-to-peer trading platform Shapeshift leverages Thorchain’s tech to complete native swaps. Although, someone was quick to point out that Thorchain has been having some issues with hacks in recent times.
The next day, the Stacks executive mentioned the Automated Market Maker (AMM) project being built on the protocol called ALEX. The ALEX project describes how the protocol works in a blog post published on Tuesday.
According to the website and the recent blog post, the AMM allows users to lend, earn and borrow bitcoin with minimized risk and maximized returns. In a tweet, the ALEX Twitter account says that the AMM “helps crypto users preserve their capital and maximize the value of their assets – we do this by offering fixed-rate lending/borrowing and superior LTV with higher security and lower fees.”
Stacks Has Stiff Competition
The Stacks team still has some stiff competition with projects like Thorchain, Badger DAO, and RSK. Many of which already have fully operational defi applications that allow people to chase liquidity pools and other types of defi protocols. Alongside this, despite Ali’s claim that people don’t trust the network models with concepts like wrapped bitcoins, the Ethereum (ETH) and Binance Smart Chain (BSC) has an enormous lead over projects like Stacks, Badger, RSK, Liquid, and Thorchain combined.
During the last two years, ETH and BSC have seen a plethora of projects that allow cross-chain swaps, synthetic and wrapped bitcoins, stablecoins, AMMs, lending pools, and decentralized exchange (dex) platforms. Just on the Ethereum chain alone, there’s WBTC, HBTC, RENBTC, SBTC, PBTC, TBTC, and IMBTC which adds up to a whopping 250,729 bitcoin housed on the ETH network.
What do you think about the swap between Stacks and the Bitcoin blockchain and the AMM ALEX? Let us know what you think about this subject in the comments section below.