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Replying to Avatar Ryan

I have a sincere question related to the economics of Stacks:

Proof of transfer is a neat idea for transferring Bitcoin to a sidechain that is not federated, and also not burning it. In order to mint STX, the miners must transfer bitcoin to some kind of contract in exchange for the opportunity to mint STX. This is clever, but it means that miners effectively have to sell BTC to get STX.

They try to balance this out by letting stakers (or stackers as they call it) stake STX in exchange for a share of the transferred BTC. Again, this seems fairly clever and demand-neutral for Bitcoin.

This brings me to my question: In order to actually use STX for gas, you need to not be staking, which means that in order to use Stacks as intended, the whole system must effectively be overall demand-negative for Bitcoin. How can this incentive model actually good for Bitcoin?

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Berserker 2y ago

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