Stacks, a prominent layer-2 solution designed to unlock the potential of Bitcoin for decentralized finance (DeFi), is gaining significant momentum.
The platform announced today that a number of major institutions are adopting sBTC, a 1:1 Bitcoin-backed, decentralized programmable asset, as a key component of their Bitcoin strategies.
Since its mainnet launch in December 2024, sBTC has attracted considerable interest from industry leaders.
Early depositors participating in sBTC’s initial cap included well known firms like UTXO, SNZ, and Jump Crypto, signaling a strong belief in the project’s vision.
The initial demand for sBTC was so high that a second cap raise was implemented, tripling the capacity for deposits.
This expanded cap was met in less than 24 hours after its launch on February 25th, welcoming a new wave of builders, institutions, wealth managers, and retail investors eager to access sBTC.
Unlocking Bitcoin’s potential: $1T in passive capital
One rapidly growing sBTC use case, Zest, has already amassed nearly 40% of all sBTC in the protocol, demonstrating the asset’s usability and productivity for bitcoin holders.
The unique design of sBTC allows for fully activated capital for BTC holders instead of solely staking or locking BTC on the L1. sBTC enables flexible smart contracts and transactions that leverage Bitcoin’s security and irreversibility.
The next critical milestone for sBTC will be the launch of its withdrawal functionality, which is expected in March 2025.
Tokenized Bitcoin on the rise: meeting growing demand
As of February 2025, the demand for tokenized Bitcoin assets has been steadily increasing.
According to BBA data, Tokenized BTC supply has reached 1.67% of BTC’s circulating supply, a level not seen since October 2022.
This surge in demand is being driven by bitcoin holders who are increasingly recognizing that Bitcoin layers, like Stacks, can offer solutions aligned with the core promise of Bitcoin security.
“The growing adoption of sBTC provides essential liquidity for developers building and scaling applications,” said Alex Miller, CEO of Hiro.
We’ve already seen builders using our developer tools adopt sBTC to deliver solutions like native bitcoin yield generation, lending, borrowing, DEXs, and scaling of L1 activities like Runes and Ordinals. I predict that next we’ll see more innovation of these use cases, as well as new ideas through AI agents and more.
Strategic investments: supporting the sBTC vision
“We look for technologies that unlock latent capital and expand potential use cases for Bitcoin,” said Saurabh Sharma, at Jump Trading.
sBTC fosters a more dynamic and interconnected financial landscape, and we are pleased to participate in the ecosystem.
As a category, Bitcoin Layers have experienced dramatic growth in the past year.
Data from DeFiLlama shows that Total Value Locked (TVL) on Bitcoin Layers has grown over 460%, from roughly $500M in 2024 to approximately $2.8B in February 2025.
Given sBTC’s proximity to Bitcoin and its adoption by major industry players, including top staking providers, custodians, and ecosystems like Solana and Aptos, the project is positioned to connect the demand for Bitcoin with a global, interconnected future across all of crypto.
Stacks and the community building this DeFi ecosystem believe that “all roads lead back to Bitcoin,” emphasizing the fundamental importance of Bitcoin as a foundational layer.
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