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- Stacks native crypto STX delivered a strong rally in February as it unveiled Bitcoin-based Ordinal NFTs on the blockchain.
- Bitcoin-based NFTs are gathering steam with popular players like Yuga Labs joining the bandwagon. Bitcoin investors and developers object to this development.
Crypto project Stacks (STX) has been recently in the news for becoming one of the first blockchains allowing the minting of Bitcoin Ordinals. Over the last month, the prospects of inscribing NFTs on the Bitcoin blockchain network touched a new high.
It all started after Casey Rodarmor inscribed an Ordinal last month on January 29. This received an overwhelming response as the trend took off in no time. Currently, the minting of Bitcoin Ordinals is limited to technical users having a Bitcoin node. Besides, the minting takes place primarily through OTC channels.
However, in the past, Ordinals have invoked an issue with Bitcoin maximalists arguing that it could lead to network congestion. Also, in comparison to Ethereum’s NFT marketplaces, the infrastructure for Bitcoin-based NFT marketplaces is highly underdeveloped.
Also, the Bitcoin developers community has discouraged previously that using the network for anything other than payments could lead to congestion and ultimately leads to a surge in transaction fees. Despite the robust infrastructure, the Ethereum blockchain faced congestion issues during the crypto bull run of 2022 and 2021. This was mainly caused by DeFi and NFTs. On the other hand, the Bitcoin fees stayed at optimum levels during the bull run.
The report from CoinShare notes that the adoption of Ordinals will be subject to social acceptance of the method for inscribing additional data on the Bitcoin blockchain. It cites the previously failed attempts of introducing smart contracts activity on the Bitcoin blockchain, It notes: “similar projects of Bitcoin’s past have had little impact on investors and users alike”.
The surge in Bitcoin Ordinals and Stacks Price Rise
At the beginning of February last month, the total number of Ordinals on the Bitcoin blockchain surged significantly. But the trend was immediately subdued due to the lack of trading infrastructure with less than 10,000 NFTs inscribed on most days.
But amid the hype of Bitcoin NFTs, STX – the native cryptocurrency of Stacks blockchain – jumped by 256% last month. Some players are bullish about Stacks expecting that it will make Bitcoin Ordinals more accessible to users by hosting marketplaces and facilitating the minting process.
On February 2022, the Stacks Foundation shared an update of the new protocol Stacks 2.1 that seeks to improve the blockchain by adding EVM compatibility and synthetic Bitcoin (sBTC) using a secure bridge. Also, the .BTC naming service that lives atop the Stacks network could generate huge trading activity if the demand for .BTC addresses spikes.
With the 2.1 upgrade, the Stacks blockchain will allow the direct sending of its assets to bitcoin addresses. It will allow proxy access to the Bitcoin blockchain without the need to create a separate Stacks address.
But what justifies the STX price rally last month in February? The blockchain activity is still insufficient to justify this price rally as only 1,000 unique active wallets engaged with DApps on Stacks last month. Also, Stacks’ NFT marketplace Gamma failed to attract considerable users to its platform. There were less than 100 wallets trading daily on the marketplace.
Gamma supports the minting of Bitcoin Ordinal NFTs and sending them via Stacks. However, there’s a major UX problem since it requires a separate address in Stacks wallets that’s Ordinals compatible. This led to several users sending the NFTs to the wrong address.
User-Friendly Ordinals Support
Developers in the Stacks ecosystem are working on bringing user-friendly Ordinals support. Also, they are experimenting with atomic swaps between Bitcoin NFTs and STX. They plan to develop this functionality into a complete marketplace.
But Stacks has competition in line since there are other players looking to bank on the trend. For e.g. Ordinex is developing an Ordinals trading platform that will be accessible to Ethereum users through the MetaMask wallet.
Yuga Labs, the creator of the popular Bored Ape Yacht Club has recently unveiled a Bitcoin-based NFT collection TwelveFold which will consist of 300 generative NFT artworks.
Introducing TwelveFold. A limited edition collection of 300 generative pieces, inscribed on satoshis on the Bitcoin blockchain.https://t.co/aFWEIhzqcI pic.twitter.com/PjWABKKBr4
— Yuga Labs (@yugalabs) February 27, 2023
