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Bitcoin L2 becomes the focus, what other projects on Stacks are worth paying attention to?

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These projects on Stacks are attempting to bring the three pillars of DeFi and other public chain ecosystems to the Bitcoin ecosystem, making the entire Bitcoin ecosystem more accessible.

Original title: "Bitcoin L2 becomes the narrative focus, what other projects are worth paying attention to on Stacks?"

Original source: DeepTech TechFlow

The current cryptocurrency market is in a bull market, and it is not unreasonable to remain optimistic about the development of Bitcoin under the promotion of many innovations such as Ordinals/BRC-20 centered around Bitcoin.

However, only inscriptions and memes cannot change the overall weakness of the current Bitcoin ecosystem. In order to further develop the Bitcoin ecosystem, related liquidity, DeFi, and similar products commonly found in other ecosystems also need to appear on a large scale.

Therefore, building a thriving DeFi application layer on the basis of the current Bitcoin ecosystem has become another hot narrative and a new hope for Bitcoin supporters.

Specifically in this field, Stacks, which is dedicated to building the Bitcoin Layer 2 network, is in a leading position.

According to DefiLlama's data, the current TVL of Stacks is $34.49M, which has a significant room for growth compared to Ethereum L2.

As the second layer of Bitcoin, Stacks is anchored on the Bitcoin blockchain, but it is also an independent protocol that introduces Ethereum-like smart contract functionality, opening up new possibilities for applications such as DeFi and NFT.

Therefore, new projects built on Stack can enable Bitcoin to be more than just a simple value storage tool.

With the increasing attention on the Bitcoin ecosystem, especially the inscription system, we should also continue to examine whether new financial applications have emerged on Stacks.

This article investigates the current popular projects on Stacks, providing the latest information for investment research and decision-making.

Alex: Bitcoin DeFi Platform

Project Introduction

ALEX is a Bitcoin DeFi platform based on the Stacks blockchain, dedicated to activating various use cases for Bitcoin. ALEX mainly provides the following services: launching its own token, risk-free lending with fixed ratings and fixed terms, a DEX (decentralized exchange) with AMM mechanism, and earning interest by depositing tokens and obtaining high returns through yield farming.

ALEX's goal is to break down the barriers between Bitcoin Layer 1 (L1) and Layer 2 (L2) to provide a seamless Bitcoin DeFi experience.

Latest Project Updates:

On December 11th, 2023, ALEX released the Alpha version of the Bitcoin oracle, which is expected to complete testing by the end of the first quarter of 2024. This version was developed in collaboration with partners such as Domo, BIS, Hiro, UniSat, Xverse, and Xlink. The oracle aims to provide critical security and efficiency layers for assets on Bitcoin while maintaining decentralization and high transparency.

Project website: https://app.alexlab.co/swap

Official Twitter: https://twitter.com/alexlabBTC

Alex Token

$ALEX is the participation token of the platform, providing protocol and platform governance rewards for holders of $ALEX who participate in governance. $ALEX is also a medium for incentivizing platform activity participants (i.e. providing liquidity and staking on Alex's DEX). $ALEX can be obtained through participation and staking in DEX and LP, and has three main functions:

Incentive: The main purpose of $ALEX is to serve as a medium for incentivizing participants in liquidity provision and staking activities on DEX.

Pledge: $ALEX can be locked to earn $ALEX as a reward. 50% of the initial token supply is allocated for pledging, where $ALEX or liquidity tokens can be locked to earn $ALEX as a reward.

Vote: $ALEX holders have the right to vote on, but not limited to, the following aspects: future platform development, transaction fee rebates for liquidity providers, reserve allocation policies, $ALEX token supply policies (including buybacks and issuance).

Token distribution: The initial total supply of $ALEX is 1,000,000,000. The foundation accounts for 20%, community staking accounts for 50%, and the founding team and early investors account for 30%.

On December 7th, 2023, the official Twitter account announced that the roadmap will be released next week. As of the time of writing, the roadmap has not yet been released, so readers are encouraged to stay tuned.

Project website: https://velar.co/

Official Twitter: https://twitter.com/VelarBTC

VELAR Token

Velar token ($VELAR) is the core of the protocol economy. The token has various use cases:

Incentive: Provide rewards for liquidity providers.

More extensive ecosystem partnership relationships (such as discounts for third-party dApps).

Upgrade IDO allocation.

Token distribution: The total token supply has not been announced yet. The community reward accounts for 35%, the treasury accounts for 20%, the founders and team accounts for 20%, the advisors account for 5%, the investors account for 15%, and the airdrop accounts for 5%.

The token $VELAR is not yet listed, but during the period from June 14th to July 14th, all Velar testnet users will receive a $VELAR airdrop, which accounts for 5% of the total airdrop.

Zest Protocol: Decentralized Lending Platform

Project Introduction

Zest Protocol is a decentralized lending platform based on Bitcoin, focusing on solving a key problem in the Bitcoin economy: underutilization of Bitcoin. Typically, a large amount of Bitcoin is idle in cold storage, hindering economic growth. As a blockchain-based open-source lending platform built on the Bitcoin blockchain, Zest Protocol provides a solution by increasing transparency and auditability through smart contracts.

This agreement has two different types of pools:

收益池：Users can earn returns by depositing Bitcoin into these pools.

Borrowing Pool: Allows users to borrow and lend using their held Bitcoin.

This design allows Bitcoin holders to safely access liquidity without selling their assets, reducing reliance on centralized financial platforms (CeFi) or custodians.

Zest Protocol started development in June 2022 and has undergone multiple audits and testnet runs. It is planned to launch its mainnet in Q2 2024.

Latest Project Updates:

On October 10th, 2023, Zest Protocol passed the second smart contract audit by LeastAuthority, ensuring that users can experience the highest level of security and reliability through the Zest protocol.

Project website: https://www.zestprotocol.com/

Official Twitter: https://twitter.com/ZestProtocol

Currently, the project has not yet launched its token, but the plan to launch the mainnet in Q2 2024 is worth further attention. Readers can follow the official Twitter and website for further updates.

Uwu Protocol: A lending protocol based on its own stablecoin

Project Introduction

UWU is a lending protocol built on the Stacks chain based on the UWU Cash stablecoin. It mainly consists of two core components: UWU Cash and xUWU shares.

主要特点和功能：

The main features and functions are:

Borrowing Mechanism: Users can deposit STX as collateral and borrow up to 66% of the value of their deposited STX in UWU Cash. Currently, there is no need to pay interest and there is no fixed repayment date.

Stability: The UWU protocol maintains the stability of the UWU Cash stablecoin through clearing and arbitrage mechanisms.

Risk: Due to the high volatility of the supported asset STX of UWU Cash, there is a risk of large-scale liquidation or stablecoin decoupling in the event of a rapid price drop.

UWU Cash

UWU Share (xUWU)

Bitflow Finance Token

Currently, the project has not yet issued any coins, but it is actively running testnets and developing new features. Readers can actively follow the official Twitter and website to stay updated on the latest developments.

Overall, these projects on Stacks are attempting to bring the three major components of DeFi (stablecoins, lending, DEX) from the Ethereum and other public chain ecosystems into the Bitcoin ecosystem, making the entire Bitcoin ecosystem more usable.

Bitcoin itself, whether it should be a single value storage object or follow Ethereum's lead to become a platform that supports more applications, we cannot predict the answer.

However, in the current situation, any new attempt in any direction is worth our attention. The market values the new rather than the old, and sometimes attempts that seem "unnecessary" may ultimately have enormous potential.

Stacks is the current market leader in the Bitcoin Layer 2 field, and the DeFi projects built within its ecosystem may also have such potential.

Exploring before the maturity of the ecosystem is widely known often leads to greater rewards.