Recent Industry Updates + Non-custodial Bitcoin on Stacks: sBTC

Recorded: Nov. 9, 2022 Duration: 0:54:28

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Hi everybody, welcome welcome welcome. We've got plenty to talk about on today's subject and on the industry as a whole. We're going to wait maybe just another minute or so more for the remaining panelists to arrive as well. And if this is your
first time joining us. Welcome, welcome, welcome. This is our weekly crypto internet show. We talk about everything that's happening within the stacks space, the broader ecosystem and building on Bitcoin. And the way that our shows work is
is we'll go through a round of questions with our industry experts and panelists and then towards the latter half of the show we'll do our best to answer one or two questions from you, the live audience, as well. Today we'll do our best as I know there's a lot of questions a lot of things have happened within the industry
not only in the last few hours today but more impactually in the last 36 hours in some cases even the last week since our last space is here in the stacks ecosystem. So a lot to talk about and a lot to cover and we'll do our best to cover all of those things including today's
topic, which is all about non custodial Bitcoin on stacks, also known as S-B-T-C. I'm your host today, Kyle Olica, and joined by some outstanding friends and family members or and throughout the Stax ecosystem. We've got Hatred
We've got Maddie stacks. The one and only Ken, a part of Xverse, who will be sharing a little bit more about their role within SBT and last but not least, the one and only. Jensay of Alex. We'll also have Menebe joining us here in just a little bit as well. But we will go ahead and get started as want to talk
about a lot today. I think generally we'll open up just a general question for everybody. A lot of things just happen today within the industry of Web 3. We don't necessarily need to get into details and who, what, when, whatever, but I think it probably goes
to hear just general thoughts and sediments on really what just occurred today in the last 36 hours, all of Web 3 and how that may impact things going forward in a time when we are all very
had down and focused on building and developing and growing not only the stocks and the Bitcoin layers ecosystems but ecosystems as a whole and the industry as a whole as well. So, Maniv, I know you just joined. I would love to hear your thoughts and takes on just again the last 36 hours and
what impact could have for the industry as a whole going forward. Yeah, I was going to suggest that maybe we need to change the topic because everybody is probably thinking about what's going on in the markets, but we should each cover some of the non-custodial big ones.
as well, which is kind of like the main focus, the main thing that I've been doing deep on. As far as the markets feel like this is obviously surprising to some level, but at the same time, sort of like not surprising, right? Like it's what's surprising to me
is, you know, if I was in SPF shoes, I would let Elamida basically go down to zero, but never use FDX plans. Right? Like FDX is still a
profitable business, it means money on trade, it's a good business. Whatever other leverage happened, happened, but just never touched consumer funds and keep the exchange separate. To me, obviously, we don't know the details, but to me,
It sounds like that consumer funds were used and that's where basically everything collapsed. I think the damage is actually going to be very, very deep from this because at the same time SPF was becoming like the face of crypto, right? Like, showing
up at that contrast, like having, you know, like a very, like, you see a space everywhere, right? Like on magazines, like on ads, things like that. So I think it was, and with the image that this is the more regulated big boys club, right? So,
It's suddenly vanishing like this. It's going to be a major blow because also, I think you should look at some of the FTX investors as well. Their last round was, that's like a 30 billion valuation and it was the blue chips of the blue chips, right?
like you don't get more blue jib then Sequoia capital and this was one of the largest checks that Sequoia actually wrote. Paradise was in there and then all of the other players like Tiger Global, Soft Back, this and that, like, Thomasic, every
one was in the deal and I think this is not a they use their growth funds for the deal from this minor signing and they're going to take a massive hit because the growth funds are not the risky funds right like the growth funds are meant to be deployed on
that's risky companies. Right. So you are some company that is about to go public or these are not your risky bets, early state seed, even big stage bets where people understand that a bunch of these things are going to zero, not at the court fund stage. So all of that evaporating suddenly, I think
is an issue, but I think what let me let me go over the race first and maybe then I'll switch to like what's the bright side. I don't want to pay the overly gloomy picture either, but what to worry about now like looking forward. I don't know if people have read the Arthur hand or
I think that's one of the best descriptions of what happened and what might happen. But if people haven't read it, how do you comment? Take a look at what are our terms. Maybe we can end that here as well. And the biggest thing to worry about right now is there are two types of companies that might also go
go belly up. One is lenders, especially from the Alameda side, that anyone who was a counterparty to Alameda who had explored there, you're going to see the ripple effect a little bit. Sort of like
We'll see how bad it is, but this is similar to when 3AC went under, after a while you start seeing the ripple effects of other companies. But we've sort of been through one cycle already. So let's see how bad it gets. But let's just say that there are
companies hiding in plain sight that we might hear about in the coming days and weeks that they just couldn't survive and they're also going under, right? That's one aspect of it. I think the other aspect of it is actually minors, a bunch of Bitcoin miners, public
companies they went under recently at the previous levels of the trading prices and at these levels I think they're basically going to go under. So I think those are the so there's more bad news to come along those two accesses. Then I think another
So, the vector here is the FDX money, the people who weren't able to withdraw capital, I saw in article that, you know, multi-point for example, could withdraw 10% of their AUM.
from FDX and it basically now looks like it that's going to bankruptcy and they'll have to wait a bit longer. I think 10% of the Bitcoin can take that hit, but there might be other parties like large institutional players who basically had just trading capital, sitting on FDX that they had no loss, right? So what is that going to result in?
I think the funding environment is a little bit worse, right? People are going to start writing even less checks. People are going to start withdrawing loans from here and there. I think the Multicoim article already said that they are basically pulling any outstanding loans wherever.
there's just going to be a lot of fear in the market. Like people are just not going to trust each other for a while. Let me stop there. Like I think this was the what's going wrong part. And then I'll do the part two like what's the what's the bright side from there.
And I think I put the right tweet up pin to the top that you mentioned. Many, if not, definitely the Emmy and I'll add it up there. Yeah, they had about FTX last I saw, I think was about 36 billion in was the last valuation they took capital in and you're right, a lot of those
I saw you had your handraiser were waving. I want to make sure you give a chance to add in and then Patrick as well will continue on the other side of it. I'm sure thank you so much everybody to be here. It is a definitely very very difficult day for all of us. Before I say
I just want to let you know that Alex is a small startup, but we don't we never put our fund in FTSE or Rx changes and we have a runway till you know at least you went 20 24 many of you here know about this while we need stop at the place that I know he wants to
later as some more positive note. Let me just add up on my point of view, we are veteran quant from Wall Street. We have seen this since 1998. At least my personal trading experience, Russia default LTC and this smell very much like, almost like a
But the US started to change plus LTCM, they are the same owner and the women bus. So I would say that on top of what Monip described what happened, I would like to use just one minute to talk about what does this mean for crypto short term, but also try to get more positive note on what is
in meaningful crypto over the long term, particularly a different like Alex, right? So the collapse of FTNs is definitely a significant setback. That's just not sugar coated. It damages the confidence and it absolutely destroys trust. The large investors that we have been talking to,
that they would have entered to the industry, it will pause. And the regulators will now take a much, much more skeptical look. Now, concerns now is also obviously, as Muni mentions, the Alameda research. And that's where the problem is. It will be forced to unwind trade.
to meet margin calls and then it will help drive out all the prices of the token such as Solana which is already down 48% in the past 24 hours. And beyond this immediate impact, the event will accelerate accelerate the proper regulatory framework for crypto and also crypto
changes. I have been saying that, you know, I think the biggest head will fortify is the regulatory uncertainty. And Gensro already today was on Bloomberg around 3 for PM EST talking about FTX. But at the same time, you know, well run exchanges are now even
implement in proven reserves that allow exchanges to you know, cryptographically prove that they own reserve in excess of the customer's asset. So these are the short-term impact of crypto. But I also want to add that what is in me for crypto over the long run? And I think that's what my role as your big
as a first cohort of STACs developers. I really truly believe that long term, the failure of FTS does not alter our promises in crypto. I have tears now. I truly believe that
crypto has lived through multiple multiple collapse in the 40 years of history. Mount Goaks remember that one then we have Celsius block 5, 3 error capital, Voyager and now FTS and others. But remember these are C-Files. C-Files
have blown up, not defect. None of these collect reflects really the fundamental issue or the value that while we are here, or the crypto itself, which is that defies ability to program money like software or create digital property
So all these collapse, I think it really reflects the inexperience CEO, right? Short term grid, a head up, a long term value and a customer. So that's why I want to say unfortunately, you know, I took a little bit longer, but later I will be very happy to
to talk about what Alex built in, particularly in conjunction with the SBTC. Thank you, Kyle. Thank you. And I did replace the link attached with the correct one, so a different thread from Martha Hayes for those that were looking for it. Many sex can Patrick any any quick thoughts
on just the general impact of them and even if I want to circle back to the other side of your thinking there. Sure, yeah, I think one thing that we should probably hit Reader A is that people should get their coins off exchanges, right? It doesn't matter how big you think this exchange is, I think a lot of
them will do things under the hood that probably not too savory. So I recommend everybody to move to Hardwallet or Self-Custody and I think this also helps deep
because if you're self-custaining, how do you exchange or participate in DeFi protocols? I think this is where DeFi exchanges like Alex comes in so that people can hold their own tokens and still be able to do things with it.
netty stacks, Patrick, and additional thoughts to add before you loop back over to him and even
Yeah, I mean from my perspective, I think this just highlights not only the importance of getting your, you know, your tokens off exchanges, you know, owning your keys, but also if you take a macro kind of view,
There's decentralized problems that are happening. There also have been issues that have arisen exploits in DeFi, right? Like the mango exploit a couple weeks ago. And I feel like the central key to these, the thing that these
These happen common, although they have many differences, is that they're not happening because of technical risks. They're not happening because of hacks. They're not happening because of attacks by hackers. They're happening because of economic risks that are not covered.
So whether you're a centralized entity and you should be following risk controls and having better protocols in place or whether you're building a DeFi protocol, you need to think of the code security but also the economic security and
have that rigorously tested and have safety measures in place, one of the benefits of DeFi is that those things can be transparent and available for everyone to see rather than just relying on a centralized party
"Yep, we've done that. Take us for our word." So, echoing the same sentiment, I think, you know, obviously a step back in the short term, but opens the door and the conversation to necessary maturation for the future.
I think we've gone to the latest studies so I was about 3.6 billion DeFi leaks bridge hacks and otherwise this year alone as well to Maddie's point Patrick any last comments if not Maniva I want to hear the other side of this but Patrick want to make sure you hear the thoughts in too. Don't mess with CZ.
I don't really like Kelly. But yeah, I don't have any real comments. Actually, I wouldn't mess with CZ. That's actually real. It's I mean, yeah, that's it. That's a very good point. I see emojis all across the board agreeing with you on that. Jente.
I want to clarify one thing that I agree most of what Matti say, but I would distinguish between what happened with FTX and what happened at Mongo. What happened FTX is clearly fraud. If you only exchange, you should
not use your customers fund. At Mongo and I agree with Matti, it's not a technology and the money when we were on the one panel in L.A. and we discussed this case in length. With Mongo is really the economy of the financial design of the project.
protocol is not a technology. Is that you should never have any leverage instrument at the underlying is a illiquid assets or token. And that's pretty much it. And I'm happy if anybody want to DM you, we can talk in detail about it. So I will really hear distinguished between these two cases.
Yeah, that's fair, Chantay. I mean, I think you know all the details are yet to be released obviously for FTX, but it does seem like In addition to poor practices like using their own token as major forms of collateral There was also something that goes beyond poor practice and goes into you know, legality questions. Yeah fraud
Yeah, and to Matties Point, we are talking about this all in very, very much real time. The public release of a lot of these areas that we were discussing have come out minutes, hours, and short few days ago.
A lot is what we're seeing and what has been released but there is probably going to be much more to be revealed in the coming days and weeks months as well. So just to clarify that for everybody. Manip, take us to the other side. What's the other side of your thoughts on that? Yeah, I think so. The other side of talk is
I think when the beer markets become really bad, a lot of people actually flock to be cool. They appreciate the buy Bitcoin is simple, why it is supposed to be a low-risk type of a thing.
And the other thing that happens is that it wipes the market. One crop is done and you clean out the soil and you start focusing on the next one. In a way, if you're a builder, I would caveat
that if you don't have capital, that's unfortunate situation to be in because it's going to be very hard to raise capital in these times. But you have some of my account, this is the time to actually just basically start ignoring everything.
go ahead and actually build because the markets are going to come back. If the markets never come back, this is a much bigger issue. But if you just look at historically, we're probably turn to forth cycle now. The opportunity is really, really big. And what happens with this is the way, I think we just
sort of like accept how these markets work. There's media and people kind of like just rush in, but that does attract capital users, developers, right? So it serves a purpose.
And then the crash happens and it kind of like cleans out the market like people who are true believers who actually believed like we're driven by a mission. They stick around and everybody else like sort of like disappears. And I think this is that moment like it is true.
There are some people out there like Chris from placeholder is one of them. They never use the bridge right they're buying on the open market but there's a blood bath right now like they're doing it right and they're they've been around and they've
and they know what they're doing and I think that it's people like them that are going to look like geniuses down the road and same same rebuilders there are some people who might be today thinking that you know let's say you join crypto like a year or two
will go and like, did I make a mistake and should I leave? Where says there are people who are not thinking like, hey, this is my time to shine. I'm going to start working extra hard because my probability of success is a lot higher now because the competition has just been cleared out of them.
So it's a very good point. Any additional thoughts? If not, I do want to kind of bring up how a non-custodial BTC or SBT does fit into this picture. But again, this is very timely, very impactful moment in time that I think is important for us to cover. Patrick, Jente, Maddie, Stacks,
can any additional thoughts to Meneves Point as he said we are in the I believe it is Meneve I think the fourth cycle if we go back to about 2009 2010 and that real first cycle the 2013 we are in that fourth cycle this going through right now our phase change and yes it is going to be tough to
raise capital, but at the same time it is a chance to really look at the industry and what's necessary to be fixed on all sides and those who are able to build or have the ideas can focus that energy into fixing and creating those new pieces of information.
for structure of those new applications. We look at those phase changes that's kind of how and really what propelled us into those next cycles. That's what brought us into the 2019-2022 cycle we're in right now and what will take us in this 22-23 to 25 cycle we're heading into and beyond. Yeah, I would say
I would say one thing just kind of related to what Manoeba is saying. And I communicated this to several teams, which is there's this weird sort of human reaction that happens when you enter into a bear market, especially like a crypto bear market. And the reaction is almost like
look around, assess, see what's going on, almost like relax in a way, because things feel like how to control. But I think the exact opposite is actually what teams today should be doing, which is
working really hard, staying very focused, like delivering really great products and trying to get the product market fit as soon as possible. Because when the next bull run happens, you're going to be in such a better position, having invested all that time and energy and focus into this time right now.
This is the exact time you're working your ass off basically. It's completely counterintuitive. Just from a pure emotional market response, I think it's not natural to do. I think this is something that people have to be unnatural at doing if you're in crypto.
That's right. I mean, Ken, many stacks, Chantay, anything else to add. All three of you are working to both Patrick and Minnie's points. You're all working in this area, heads down, building and pushing towards those new areas of development, those new applications.
that application side of things or that infrastructure side but would love to hear your thoughts. I mean, how are you each kind of taking this, maybe we'll switch gears and how are you each taking this as founders and looking at this and how you're going to
fill these gaps or build for this next cycle after
news in again the past couple days and these quick changes that you all have to make as founders. Chintay, let's come to you and then we'll go across.
Sure, as you all know, Alex was among the first pro-Judah that came to stack late last year. And I don't know if you remember Colin Petrie as you were there doing our demo day. What we promised is that we want to build a road in highways towards the Bitcoin economy.
that was in our demo day what we said. And like many other builders, you know, I think our team are mature veteran Wall Streetquans. We have seen lots of those up and down in from traditional finance. So this doesn't deter us. We know what's ahead of us. And we
We have brought a track record of a building billion dollar businesses before we came to build an Alex. And since then, as you know, we launched really early January, we became very quickly, thanks to all of you here, we became the biggest progenstacks. We build the ideal launch pad, we build the AMN DEX,
for efficient token swap and with the deepest liquidity on stacks. And what it is, I remember at the all time file, we have close to 19 billion TBL, all community-driven, no big well in this ecosystem. And now, our first iteration of LEMBARO
with collaterally balancing, collaterally, reverse is basically just, you know, an auction type of technology that to manage a downside. We have built all that. So yes, it is tough. I remember I had this discussion with some of you here who are my mentors in this space.
I want to shout out to Moodybe Patrick, US, well, a Matthew, we were very close together. Can you and I were very close together as well? You know, it is tough. I remember I showed you that the Q3 third quarter revenue compared with Q1 and Q2 just dropped like 90%.
But I kind of distinguish, you know, these type of shocks in three factors. One is macro-specific factor, one is crypto-specific factor, one is a stack-specific factor. Micro, we can't control.
Crito, we can control stacks, we are part of stack, we are stack, so we work closely together to push our agenda, our vision forward, which is Bitcoin company. So that's what we never stop building. We do have cut, I have to
very honest this morning I was talking to Rachel who hasn't really slept for a few nights by the way I want to give a shout out to her here as well she's usually quite media shy but she's a world class year 4 if we spend $100 I swear how did she yell at me that's why we still have runway till 2020
So we spoke we are going to cut our team up together so everybody is going to take less salary things won't be like before myself as CEO I will never take any salary Same as Rachel as a founder she doesn't take any salary. We're just going to prove
So we have built the AMM, the DEX. We are currently testing the bridge, which is a huge thing. I hope the community here realize that this is the first and the fungical token bridge between Ethereum and
And we are going to a man in large very soon. The other big thing that we are launching very soon is is order book which is going to be a very good compliment to the AMM, you know, currently also on testnet. So that's why we are once all these building blocks is
there, once the SBTC is in place, we are going to deliver two BTC yielding products. One is through our land, borough collietary balancing, which is a fixed term native Bitcoin yield driven by the Bitcoin borrowing demand. And second one is a fixed term native
Thank you, Bitcoin, you're driven by stock stacking yield, but through DeFi you can hedge out the Bitcoin and stack risk. So that's where we are right now. Thank you, Kyle. Thank you, Chenze. I'm Maddy Stacks. What are you doing right now as a founder, a builder?
developer and auditor and everything else in between in this ecosystem you're doing so much how are you preparing how are you shifting your mindset what are you kind of looking at in these this next really few weeks two months ahead yeah thanks Kyle I mean I've been I've been around
Stradify before Bitcoin existed at least in the 2008 mortgage crash I've seen a few crypto cycles as well. I think any builder, any investor, anyone really supporting some kind of
future vision, you need to have a central thesis. You need to know what it is that you believe will happen and what you are working towards as your goal or supporting others to work towards in the case of an investor for example. So it's all coming back to what do you
believe is true, what is your thesis, what do you think will happen next, right? What evidence would, what evidence would happen that would prove you wrong or make you adjust your thesis, what evidence would suggest that you're on the right path? And events like this, while they are not to be discounted, not to be made light of,
They don't shake my personal thesis. They don't shake the fundamental building blocks of Bitcoin itself, of something like stacks, right, that's extending Bitcoin itself. So that might not be true for everyone, right? Today might have changed a lot of people's thesis, but
You need to be honest with yourself as painful as it is in these type of moments and just go back to what do I believe what are things going to happen what is the evidence telling me is likely to happen next. Here's my thesis I'm going to work towards that you need to combine a little bit of stubbornness and a little bit of open mindedness when the market punches you in the face like it did.
today. And just keep the long term horizon in mind. Obviously it's a moving target, but don't just throw everything away. You know, don't throw the baby out of the bathwater. Don't just pivot 180 degrees today away from a core thesis that
you have just because things seem so crazy in the last week or for the next couple weeks to come. Keep the horizon in mind, change your direction slightly if you need to, but it all comes back to like holding on to what is your core thesis
likely it hasn't changed that much today if you're if you're in the Istax ecosystem. That said Ken you are one of the OGs of OGs I'll give you that title in the Stax ecosystem you also are building you know these
the mobile wallets and soon to be much more as well around experts. You're doing a little bit on the SPTC side. Talk to us about what you are seeing as a founder and your quick thoughts and mentality having been around the space and to many of you have seen these cycles in real time.
Yeah, so I think this is not the first bear market that the ecosystem has survived through. And like what Maddie said, my thesis and our thesis hasn't been shaken or changed. In fact, I'm now more convinced that Stax is doing it the right way.
stacks will be in much better position for the next bowl cycle. So what we're doing at Xverse, we are being mindful of our burn and we're going to continue to build. And like Chante, I also don't pay myself and we're off to
for the longest one possible for the company and there's lots of work to be done in this ecosystem and a lot of that work needs to be done from the wallet side so you know to realize that vision of stacks so we're just gonna go heads down and continue working
That said, give us a moment on what SBTC non-Castodial Bitcoin stacks. This is something you and the team have been working on. It's something that we have a much
broader threat and discussion, but I do want to make sure you get a chance to shout this out and kind of cover what non-custodial Bitcoin on stacks means just a quick minute and then I've got one last question for everybody before we wrap up.
Sure, to clarify, I'm not directly working on the SPTC protocol itself. I think many of the other engineers in the ecosystem are actually the ones that are working on this.
kind of tried to explain it in simpler terms to people. And what I can say is that basically SPTC is a form of non-custodial Bitcoin that you can use on the Stack network.
that allows you know bi-directional kind of interface between stacks, smart contracts, and Bitcoin. So it'll you know create a lot more use cases where you can use Bitcoin directly
to participate in D5, Mint, and FT's, and then also have the smart contracts send Bitcoin back out from, you know, stack smart contracts and into users' wallet.
I think that's basically the summary. Maybe Minib might have more to add to that. Minib, I apologize. I did it last week. A quick explanation. I don't know if this is going to be quick. So whatever you can tell us about SCC would be perfect.
I'm happy to do this. First of all, we should all recognize that this problem is called the Bitcoin like Pegad problem. This has been the holy creole problem in crypto for over a decade. You can go back and read the founding blog posts of blockchain from
like 2013, maybe 2014. And all they talk about is like this Bitcoin packout power. Because if you could take BTC from the main chain, put it in a Bitcoin layer and then back in a trustless way, then the reason for launching a lot of fun like these other independent chains, like
goes down a lot. Why wouldn't you just use BTC capital, which is the largest capital base or the most secure capital base? One of the big reasons I think that we have seen an explosion of these new L1s is because the Bitcoin holy grail problem
of the trustless peg out has never been solved. Like, like, people have tried it. And I think the reality, the market reality is that if you look at the current peg out systems, it's sort of unfortunate, like both liquid and RSCR, so down in the last couple of weeks and not working.
But even when they're working, you're trusting multi-sagwoll, like it's a best a federation of hardware wallets in RSCase case or in Liquid which is just a federation, you're trusting company. And he'll hold no, especially given the events of today, that you can't trust companies.
can't trust people. And especially when a lot of capital is at stake. So imagine the hardware, multi-sig wallet, solo works at like small scale, what would happen if a billion dollars is hitting on it? What would happen? The coin base has 10% of Bitcoin supply. If we think the default Bitcoin is going to be
What would happen if 20% of Bitcoin supplies actually sitting on a single month, I was like, "Well, it's not going to happen. People are not going to trust it. It's not scalable." So you need this trustless EDC pegger problem to be solved to quote unquote "unleash Bitcoin" diva.
That's the core problem when we launch the SACM in that we were, I think, aware. The name that we give this problem is Bitcoin write problem. Can you write from Bitcoin there to the main chain? So we're fully aware that this is a very, very important thing. We launch with just a read capability.
and the smart phone tracking ability. The idea was like let's try to work more on the right problem and make progress there. After seeing a lot of the builders actually build applications, it just became abundantly clear that that thing is critical. So in hindsight, it's actually much
more clear now that that is the real thing, like sure having read access is great and having contracts is great, but you're kind of like missing the main tank right like frankly. So that's why I think in the last few months, especially with the start of the bear market, you know, I have
is directed all of my attention to this thing because this is the main thing. You bring that online and I think then what happens is that for example if you look at Ethereum, most of the applications on Ethereum are going to run on Ethereum layers. Why are Ethereum layers interesting because you
can easily move capital from main eat chain into the layer and then back out, sort of like different trust models, but a lot of them are fairly trustless. And then also these layers like Arbyschannel and others are even in the Vika solution. They benefit from the security of a tier. So what would happen
with the new system is two things. One is the stack speed is a Bitcoin layer. It will benefit from 100% of Bitcoin security. I weren't going into the details of it, but basically just like Ethereum layers benefit from Ethereum security, stacks layer would benefit directly from Bitcoin security, which is huge. The 100% of Bitcoin's hash power
is actually securing the transactions that are happening on the Bitcoin there. And then, to reverse the transaction, you would have to go attack Bitcoin. And the second bigger part is that people would be able to freely and easily, trustlessly move PTC in and out of them there. And I think economics are also very important.
because there are going to be no rapid fees. No fees for pegging in and pegging out. It's free. You only pay the BTC fee on the main chain and it's process. So the experience is going to be that when you're onboarding, you onboard with BTC. You see SP, we call it SPTC. You see SPTC
up in your wallet, you do things with it. I want to take a stablecoin loan, I deploy SPDC into a contract, I think a loan out, but now programmers can actually write logic, because what Ken was saying, they can actually write contracts where they can actually call that send
personality and people can now you're limited by your imagination in terms of what you could do. So I would call this as like this is this is a thing that I'm the most excited by in all the work that I have done over the years and I think this is by far the the biggest thing.
Any additional thoughts? Our Patrick started to go ahead Patrick. Oh, Nories. If Gentay has something to say she should go.
No, I need to record what Munip said and just play every day. Because every time he talks about this, I just get so excited. As in when we came to Stagged, does he said he's something that we wanted to have? Because if you think about
You know, RAC Bitcoin, the market capitalization, let's take another 10% down, so it's about 4 billion. These are the people who really want to use Bitcoin in Ethereum, but there's just nothing there for them to use, so they have to go and center like change or
other day to use a Bitcoin and sell it and buy this rap BTC in order to do whatever they need to do on D5. Once the SBTC is here, at least from Alex Point of view, you really
You never have to sell your Bitcoin anymore. You can just swap your Bitcoin into this SPTC. You can use it as collateral. You borrow your USDC or USDA. I hope you'll be here. Buy your pizza. That's number one. Number two is
you can use your Bitcoin and put on Alex or Anzés to earn yield to earn native Bitcoin yield without even using XPTC or other former BTC. So your BTC will never leave your wallet and I think that's the most beautiful thing about
And I think that's one reason that this multi-pilliance of capital suddenly you can unlock it and you can tell people this is a yielding essay. It's not just anymore the sound money layer. I always like to say, you know, Bitcoin is something that
many layers, Stag is a smart country layer and Alex enables you to generate yield from your Bitcoin. Thank you. Thanks, Jenny. Another thing I'm really excited about is the use of SBTC for
Treasury, basically for Treasuries. Things like a dowels on Bitcoin are sort of limited by having some sort of multisig that's operated by a founding team that sort of manages where the big
if they're accepting Bitcoin. So it's not super popular yet to have Dows on Bitcoin, but SBTC could bring about more Dows that have Bitcoin. And I think that's really important so long as Bitcoin has
The largest market cap coin on Earth, I think a lot of teams and dows are going to want to manage their treasuries for a grand bit coin as opposed to
using regular raw Bitcoin that requires multi-sig. So that's like it's cool not just for a financial component but also for like um you know creating new new organizations. We might have like massive massive organizations that vote
and some SPDC is distributed upon their vote. You want to be able to make sure that that happens in an automated way. I can see a lot of Bitcoin basically getting locked
up in becoming SPTC with very minimal risk. I think it won't be desirable to move a lot of Bitcoin into SPTC as long as people are finding utility with it, which I think they will.
That's a good point. Many stacks. Any last comments? If not, I think we're going to kind of hold here. Can. Sorry, go ahead.
So I was just going to say, you know, as wallet, we're also super excited for SPTC because it really allows us to greatly improve the UX. You know, we started building experts kind of as a advanced Bitcoin wallet and the goal was to make Bitcoin more powerful using stacks.
So from day one we supported Bitcoin, native Bitcoin in addition to being a stacks wallet. But without SPTC it was really difficult to provide a truly Bitcoin native Web 3 experience as well. So you always have to make stacks transactions to do things.
BTC is really going to change the game here. It's a key component for us to be able to provide this user experience where stacks is just kind of used under the hood as an invisible smart contract layer for Bitcoin, and users don't really need to know about it.
And there might be stacks transactions that's needed, but that could be handled using sponsor transactions. So yeah, and another thing that really helps us with is it actually provides more scalable Bitcoin payments.
And as a result, better UX for the expert stacking pool. So right now, Bitcoin rewards from Experts' pool are basically distributed every once every two weeks because of the high cost of Bitcoin transactions. So the rewards on the Experts' pool
pool basically accumulates for two weeks and then we send one bitcoin transaction to distribute the rewards to thousands of individuals that are using a pool. With SPTC we now have a way to make much more frequent distributions, maybe even daily, from for the rewards
in the pool and that's going to drastically improve the experience and users will receive SPTC which is still non-custodial real Bitcoin and they can choose to withdraw that with the Pegel on-chain PTC transaction at a later time.
Yeah, I'll just add like a mental model there that if you look at interesting things that have happened in the Bitcoin ecosystem or the last however many number of years there are things like you know lightning which is faster
cheaper way to move Bitcoin. Like, SPDC sort of does that as well. Like, with faster blocks, it's like faster cheaper to move like a BDC drive down and make the MSP. Or it would be liquid, which is really like there are some exchanges that integrated and again you can make a cheaper
faster exchange with the draw over liquid again exchanges can indicate the stacks there and if you don't want to pay a high fee on the Bitcoin Man chain you can actually just withdraw on the layer and then do the peg up yourself whenever you want. So it's sort of like the super
set of all the sort of features we've seen in the history of Bitcoin. But then the thing that was like never there was smart contracts. Like they didn't have smart contracts. Liquid doesn't have smart contracts. It's a federation anyway. But once you have smart contracts, you can just do anything. Like you could write a
you know, ZK-based privacy solution, like imagine doing a trustless peg from your wallet into the Bitcoin layer, into a ZK-based privacy solution, taking minting like new BTC out and pegging that out to new wallets, and now there's no link between, you know, the original
BTC and what you have here. So suddenly boom, the type of functionality people have in Ethereum, it just comes to Bitcoin. And it comes to Bitcoin in a much more secure way because the BTC is actually sitting on a Bitcoin script. So I think people are very afraid of like hacks. I think this is where clarity, language,
is going to shine. This is where you know the long-term decisions that we have made, clarity language is all focused on safety. Your actual Bitcoin is sitting on a Bitcoin script. It's not sitting on a contract, like a full-turing complete contract, so it's very hard to hack or find a bug in a very simple
script on BTC. Similarly, 3rd-D contracts are just different. They're optimized for safety. So, suddenly, you're bringing the superpowers from Ethereum and other ones directly to Bitcoin, but in a really safe manner, in a scalable manner. And I think that's very very exciting.
looks like a green until around and we've got 100% hearts and graduations and everything on the emoji side all around. I'm gonna pause here today. We've had a very big day in the industry. We've talked a little longer than anticipated and I think it's very important.
that we covered the topics we did. And to everyone listening, we will have an additional show and spaces regarding more details around SBT, SBTC, again non-custodial get going on stacks and its impact for
the stacks ecosystem Bitcoin layers for all of those that are listening as developers and builders and also what that's how that may relate to the upgrade of 2.1 that's coming soon as well. But do want to pause here everyone has provided a lot of information it's been a heavy day for the entire industry.
as well. So please everyone, keep your heads up and keep building. If you do need anything, do reach out, we've all been through these types of cycles as well and happy to talk through anything. So don't feel like you're alone in this journey in any way, shape, form.
10 Maddy stacks, Chense Patrick and the thank you all very much as well again. Everyone please do stay safe out there. Do reach out. All of our DMs are open and do not feel like you're alone in this journey. That said, thank you very much for tuning into this week's spaces.
and crypto internet show. If you would like to tune in live, ask questions or join the conversation. Be sure to follow stacks on Twitter and tune in every week at 5 p.m. Eastern on Wednesday. Until next time again, everyone, please do stay safe. DMS are open and we'll see you next time. I'm your host Kyle LaCott. Take care everybody.