Muneeb Ali - Building Bitcoin’s Future: The Role of Stacks L2 - TOKEN2049 Dubai 2025

All right. Uh, hey everyone. I'm Manib, uh, founder of STAX. And today we are going to talk about Bitcoin's future. Everyone knows about Bitcoin.

Everyone knows that Bitcoin sort of started this industry. Uh, Bitcoin is here to stay and and I think Bitcoin is actually making a comeback in the developer circles as well. So the first thing I want you guys to pay attention to is this idea of Bitcoin dominance, right? So Bitcoin dominance is at an all-time high. It's around 65% right now.

And which is a very interesting fact because the total number of projects in the industry has actually skyrocketed. There's so many new protocols that are launching all the time, which is great to see. People are experimenting. They're building everything. But Bitcoin dominance against all these projects is actually at all-time high.

Why is that happening? It's happening because I think Bitcoin is separating itself not only from other types of assets outside of the industry, but even within the crypto industry, Bitcoin is separating itself as an asset class. And I think in some ways that's a good thing because you want you want something to become gold. You want something to become the standard that people sort of like stop questioning like, hey, what is the number one asset? What's the stable asset?

What's the thing that's going to be around decades from now, centuries from now? And I think Bitcoin with its institutional adoption and where it's heading is is sort of like already there. So if that's the trend, that's the thing that's happening, what's next? And that's a very interesting question like uh this particular idea of making Bitcoin programmable, making Bitcoin usable in DeFi in payments is has almost been like a holy grail problem in the industry for 10 plus years. What's the reason?

Basically, Bitcoin's strength comes from the fact that it's very simple. It's a very simple protocol. It doesn't change, right? People like Bitcoin because it's durable. It doesn't change.

You can't just change the Bitcoin code. You can't make changes to the Bitcoin software that easily. But on the flip side, that also means that Bitcoin is very hard to program. There's a reason why Ethereum exists. There are a reason why Solana and all these other platforms exist because they are much more experimental.

They move fast. They introduce new features. They upgrade their protocols much much faster. And that's why they have big developer communities. And I think the holy grail problem here is can we actually do the same thing with Bitcoin.

Can we make BDC programmable while retaining some of its features? So if you think of this as a triangle like imagine the way to do it is you'll build layer 2s on top of Bitcoin just like Ethereum has layer 2s like arbitum, optimism and so on. You can build L2s on top of Bitcoin as well. But the key technical challenge is when you move your Bitcoin from the base layer from L1 into the L2 is that trustless. So on on the triangle that's security meaning that do you stay in control of your BDC?

Can you do can you withdraw your Bitcoin whenever you want? Is it self-custodia the way it is on the L1? And that's a very very hard technical challenge. The other thing is UX like Bitcoin is slow by nature, right? 10 to 40 minutes block times.

That's not what people are used to now on on Salana and some of the other platforms. So, can you actually make Bitcoin transfers and payments super fast and give great UX to the to the users? So, that's the problem that we are working on. That's the problem that STAX is working on. And as I said, this is a holy grail problem which has been in the industry for 10 plus years.

For a long time, people weren't even paying attention to it, right? People were just treating Bitcoin as digital gold. They're like all the action is going to happen somewhere else. All the developers were going to Ethereum and all the other places. And then something changed almost 2 years ago.

Uh we saw which are NFTts on the Bitcoin L1. We started seeing more work like stacks and other L2s. And now I think it's becoming more accepted in the industry that yes, you can build L2s. Yes, you can have innovation around Bitcoin and exciting things are happening again. So, it's almost like a revival of Bitcoin, but that's still the experimentation era.

The thing that I'm most excited about is what I call Bitcoin dominance era, where Bitcoin applications and Bitcoin deployed in DeFi actually source to dwarf everything else that's happening in the industry. And I think it's it's it's actually only a matter of time in my mind before that happens. Bitcoin is still $1.5 trillion worth of capital today. It might be 5 trillion or 6 trillion soon.

And I think it's so much potential that's just waiting to be unleashed by developers. And that's the work STAX is doing. We are a very missiondriven community. We're Bitcoin builders. I've been in this space for almost 13 years.

Started in Bitcoin. Still hold most of my assets in in in in Bitcoin. And that's how our community operates as well. The way we look at it that Soshi started the project, but it doesn't mean that Bitcoin is not going to evolve. I think in a many ways we're sort of like carrying the mission of Satoshi and taking Bitcoin to more than more than a billion people.

So how are we doing this? We recently launched two major things. One is called the Nakamoto release which basically takes a L2 on Bitcoin and makes it extremely fast while retaining 100% of Bitcoin's hash power security. So, how this works is that when you do a transaction on the stacks L2, you get a really fast confirmation straight away. But when a Bitcoin block comes, let's say 10 minutes later or 20 minutes later, then your transaction is backed by 100% of Bitcoin security.

This way, STAX is actually almost like freewriting on Bitcoin security. We don't have to worry about our security budget because as Bitcoin hash rate goes up, the stack security also goes up. And this this works for every type of transaction on on the L2. Like imagine you're doing a stable coin payment. You do a stable coin payment and that stable coin payment is now secured by 100% of Bitcoin hash power.

And I think that is something that is so unique that that no one can sort of like compete with Bitcoin security. That was one thing. The second thing was SBDC which is our version of Bitcoin in the L2. So it's one to one backed by BDC at all times. You lock your Bitcoin on the L1 and you mint the L2 asset.

But the L2 asset is extremely fast, extremely cheap, and fully programmable. And that's the thing that we launched recently. And we right now we have a cap. We are still slowly kind of like expanding the cap. We took the cap to 3,000 BTC and within 24 hours it it filled up.

That's almost like $300 million of of Bitcoin capital flowing into your system. And I think that's just the tip of the iceberg. Once people realize that they can actually deploy Bitcoin capital efficiently in in a smooth way, in a secure way into applications, there's a trillion and a half capital that's like sitting there uh waiting to be deployed. STAX has already seen a lot of traction. It's almost considered like a blue chip Bitcoin L2 asset.

There are dozens of other L2s that are coming up as well. And we have a very interesting history. It was the first project that did a SEC qualified offering in the US and we we worked with the SEC back then and actually got a qualification and that sort of like started our journey on the path that we would do the hard things but we'll do them right and at every every step of the way we have sort of stick to that sort of philosophy and that really shows in the design of our system. We're solving the hard challenges and getting the technology right because we think of this as a multi-deade sort of a project because people really really value their Bitcoin. They would never deposited in something that they don't perceive as secure or a project that just fly by night and it's going to disappear in some months or or some years.

So we are really here to stay and we're really here to help Bitcoin grow. Anyone can be a validator on the network. So that's the beauty of open source software that you can run your own node, you can become a validator, you don't have to trust anyone, and you can be uh you can become a signer on on the network as well. And the interesting thing that's happening is that Bitcoiners are now finally discovering that they don't have to hold their Bitcoin passively just in their wallet. Like people in Ethereum, Solana, at other places, they know it very well that they can actually deploy their capital and earn yield in different ways.

But now that's happening with Bitcoin. And I think that's very exciting because that sort of like starts to put Bitcoin as a pass instead of a passive asset into a productive asset. So just by depositing your Bitcoin into the STAX L2, you can start earning some base yield. But if you actually want to use it in DeFi, for example, let's say you want to provide liquidity in a DEX or or or a per DEX like Velar, you can actually go and earn additional yield because now you're actually providing a service using your capital to to a DEX. And then people can do more advanced things like for example, there's a Bitcoinbacked stable coin on stacks right now called Hermetica and you can actually go and use it to earn additional yield.

When you enable this around Bitcoin capital which is sort of like the apex asset out there then the size of the market is actually much much bigger than some of the other ecosystems. One of the things that I am most excited about personally is the future R&D that we are doing on making the BTC flowing around in L2s even more trustless. So today I'm sort of like um releasing this information at a very very high level that there is some very exciting R&D work that is happening on SPDC which is our version of Bitcoin floating around in the L2 that actually squares this problem that I described earlier. So it's going to be extremely fast. It's going to be super secure in the sense that it's self-custodial that you you would be able to withdraw it whenever you want without trusting anybody and it's fully programmable and that is a thing that has sort of like never really been done before in the industry and I think it unlocks something that is extremely extremely powerful.

The stack ecosystem is uh has seen a lot of growth recently. So think about like how all the other ecosystems have uh stable coins or taxes or lending protocols all the DeFi primitives that were really built by Ethereum. And I think Ethereum deserves a lot of credit for actually coming up with with a lot of these initial primitives. What developers are now doing is that they are taking those ideas and they're bringing them to Bitcoin. And that's a thesis that Bitcoiners actually held for a very very long time.

Like they used to say that all the experimentation eventually would the successful products from these experiments would get implemented on Bitcoin. That was literally a thesis 10 years ago. All of the Bitcoiners would talk about it all the time. And it's so interesting to see that come true so much later. Like so what's happening now in our developer ecosystem is that people are realizing that they can do these things with BDC and they get really excited.

And I encourage everyone to actually go and try out this product. Like people still think of Bitcoin as this clunky old sort of a technology. If you if you see wallets like Electrum, you know, they feel like they're like 10 years old or something. But with SBDC and newer wallets like Leather, you can actually see the experience of what a fast programmable Bitcoin UX actually looks like. And for me, someone who's been in Bitcoin for such a long time, it's actually mind-blowing.

It's like, "Oh, wow. I never realized that you can actually do these things with with Bitcoin. I encourage you all to learn more. You can go to stacks.co.

You can read the white paper. Uh you can go play around with the with the applications that are live and hopefully that would change your mind that what Bitcoin can do and the potential that Bitcoin has. Thank you so much.