sBTC

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sBTC

sBTC

sBTC is a -backed asset on the blockchain that represents (BTC) at a fixed 1:1 ratio. It functions as a decentralized, trust-minimized two-way peg, enabling BTC to be locked on the base layer and utilized within smart contracts on . The system allows for the conversion of BTC to sBTC and back, with the goal of making a programmable and productive asset for decentralized finance (DeFi) without relying on centralized intermediaries. [1] [2]

Overview

sBTC is designed to unlock the liquidity of for use in smart contract applications, such as lending, earning yield, and trading on decentralized exchanges. [3] As a SIP-010 fungible token on the layer, sBTC can be integrated into wallets, dApps, and protocols within the ecosystem. The core of the system is a decentralized two-way peg that facilitates the movement of value between the and blockchains. This mechanism is maintained by a dynamic and open group of signers who are economically incentivized to secure the peg. [4]

The design addresses what has been described as a major challenge in the ecosystem: creating a decentralized bridge that allows to interact with smart contracts and for those contracts to trustlessly initiate transactions on the blockchain. [4] All peg-related operations, from deposits to withdrawals, are broadcast as transactions, providing censorship resistance and transparency. The total supply of sBTC is verifiably backed by BTC held in a publicly auditable wallet. [1]

The launch of sBTC was a phased process. Deposits became available on the mainnet on December 17, 2024, followed by the activation of withdrawals in March 2025. Following this, a gradual decentralization of the sBTC signer set commenced. The functionality of sBTC is deeply integrated with the Nakamoto upgrade, which provides sBTC transactions with 100% finality, meaning they become as irreversible as a transaction once settled. [1]

Technical Design and Architecture

The sBTC system is built on a framework of economic incentives, decentralized governance, and a tight integration with the blockchain. Its architecture is designed to ensure that maintaining the peg is the most rational and profitable course of action for all participants. [4]

Decentralized Two-Way Peg

The two-way peg is the mechanism that facilitates the conversion between BTC and sBTC. It operates without a central custodian or a fixed federation of companies. [2]

  • Peg-in (BTC to sBTC): A user initiates a peg-in by sending a transaction to lock their BTC in a specific script, which is a multi-signature Taproot address. Once this transaction is confirmed on the blockchain (typically within 3 blocks), an equivalent amount of sBTC is minted on the layer and sent to the user's address. [5] [4]
  • Peg-out (sBTC to BTC): To convert sBTC back to BTC, a user initiates a transaction to burn their sBTC on the blockchain. This action creates a peg-out request. The decentralized set of sBTC signers then processes this request and signs a transaction to release the equivalent amount of BTC from the peg wallet back to the user's specified address. This process is designed to be completed within approximately 6 blocks under normal conditions. [5] [4]

This process is coordinated by an external service called the Emily API, which acts as a programmatic liaison between users, the sBTC signers, and the system's smart contracts to facilitate the bridge operations. [2]

Threshold Signature Wallet

The BTC collateral backing the entire sBTC supply is held in a single Unspent Transaction Output (UTXO) on the blockchain. This UTXO is secured by a non-custodial, multi-signature Taproot address: bc1prcs82tvrz70jk8u79uekwdfjhd0qhs2mva6e526arycu7fu25zsqhyztuy. [2]

Control of this wallet is distributed among the sBTC signers, who are participants in the Proof of Transfer (PoX) consensus mechanism. To authorize a withdrawal (a peg-out transaction), a high threshold of signatures representing at least 70% of the total signing power is required. This high threshold makes it economically and logistically difficult for a malicious collusion to succeed. For each stacking cycle (a period of approximately two weeks), a new wallet is generated, and signers are responsible for transferring the remaining BTC funds to the new cycle's wallet to ensure continuous operation. Backup mechanisms, such as threshold reductions or fallback to prior-cycle signers after timeouts, are encoded in the wallet script to address potential signer unavailability and maintain liveness. [4]

Operating Modes

The sBTC protocol operates in two distinct modes to ensure both efficiency and resilience. [2]

  • Normal Mode: This is the standard state of operation. sBTC signers, known as Stackers, process withdrawal requests in a timely manner, typically within 150 blocks (approximately 24 hours). Peg-in and peg-out operations occur smoothly, maintaining the 1:1 backing of sBTC. [4]
  • Recovery Mode: This mode is a critical fallback mechanism that activates if signers fail to process withdrawal requests, for instance, by going offline. In Recovery Mode, a portion of the rewards that would typically be distributed to Stackers through the PoX consensus mechanism is instead redirected to fulfill outstanding peg-out requests. This ensures that users can eventually redeem their BTC, even if at a slower rate, and it imposes a significant economic penalty on non-compliant signers for failing to perform their duties. [4]

sBTC Signers (Stackers)

The security and liveness of the sBTC peg are maintained by a decentralized, open-membership group of signers. These signers are participants in ' PoX consensus who lock their STX tokens, known as "Stackers." [4]

In the sBTC system, these Stackers take on the active role of maintaining the peg wallet and signing peg-out transactions. Membership is dynamic and permissionless; any STX holder can become a Stacker and participate in securing the sBTC system. A Stacker's signing power is proportional to the amount of STX they have locked. The system's economic model rewards Stackers with BTC paid by miners. This inherent reward mechanism compensates them for their work in securing the peg and eliminates the need for user-paid wrapping or unwrapping fees, with users only responsible for the standard network transaction fees. [2] [4]

Security Framework

sBTC's security is multi-layered, relying on economic incentives, cryptographic security, and deep integration with the network's own security model. [4]

Economic Security

The system is designed to be "incentive-compatible," meaning that acting honestly is the most profitable strategy for participants. Signers (Stackers) are required to lock STX collateral that is programmatically targeted to be of greater value than the BTC they secure. This creates a strong disincentive against theft, as a malicious actor would stand to lose more in collateral value than they could gain by stealing the underlying BTC. [[https.stacks-network.github.io/stacks/sbtc.pdf][sBTC technical whitepaper]]

This is enforced by a Liveness Ratio, a protocol limit on the total sBTC supply relative to the market value of the STX locked by Stackers. The default target for this ratio is 60%. For example, if $100 million worth of STX is locked in consensus, the maximum circulating supply of sBTC would be capped at $60 million. If the price of STX falls and this ratio is exceeded, new peg-ins are temporarily paused until the ratio returns to a compliant level. This mechanism helps ensure the STX collateral is always sufficient to economically deter attacks. [[https.stacks-network.github.io/stacks/sbtc.pdf][sBTC technical whitepaper]]

Protocol-Level Security

sBTC benefits from several protocol-level features derived from the blockchain's relationship with : [4]

  • Bitcoin Finality: Following the Nakamoto upgrade, transactions on achieve 100% finality. Once an sBTC-related transaction is confirmed on and anchored to , it is secured by the full hash power of the network and cannot be reversed.
  • Censorship Resistance: Key actions, such as electing signers and submitting peg-out requests, are broadcast as transactions directly on the L1. This design choice prevents miners or other entities from censoring or ignoring peg-related operations.
  • Fork Alignment: The blockchain is designed to follow the fork history of the blockchain. This ensures that the state of the sBTC peg remains consistent even in the event of a chain reorganization, avoiding critical issues that can affect wrapped assets on chains without this property.

Audits and Bug Bounties

The sBTC protocol code has undergone comprehensive security audits by external firms, including Asymmetric Research. The project also maintains an active bug bounty program in partnership with ImmuneFi to incentivize security researchers to discover and report potential vulnerabilities in the system. [1]

Ecosystem and Participants

The sBTC ecosystem includes a wide range of participants, from the signers who secure the protocol to the DeFi applications that leverage its functionality.

sBTC Signer Network

The initial sBTC signer set was established through a community vote, weighted by STX holdings. The network includes a mix of reputable industry participants, infrastructure providers, and community organizations. Some of the entities involved as signers include: ALUM LABS, , Asymmetric Research, , , Blockdaemon, Chorus One, Copper, , Hex Trust, Kiln, Luxor, Near , and Stacking DAO. [1]

Supporting dApps and Protocols

Several DeFi applications within the ecosystem integrated sBTC to bring Bitcoin-native use cases to their platforms: [1]

  • Zest Protocol: A lending protocol for .
  • BitFlow: A decentralized exchange (DEX).
  • ALEX: An open-source DeFi protocol on .
  • Granite: An autonomous liquidity protocol for .
  • Velar: A multi-feature DeFi application.

Wallets and Partners

sBTC is supported by major wallets in the ecosystem, including Xverse and Leather. Broader support from institutional custodians and other third-party wallets has also been part of the rollout plan. Key supporting organizations and partners include the global ATM network CoinFlip, the -focused accelerator Fund, and venture capital firm Portal Ventures. [1]

Market Data

As of December 16, 2025, sBTC was listed on with a price of $87,289.83. The 24-hour trading volume was approximately $14,544. Its market capitalization was reported at $381.45 million, based on a self-reported circulating supply of 4,370 SBTC. The total and max supply were also listed as 4,370 and infinite, respectively. The asset's all-time high was recorded on November 9, 2025, at $165,775.05, and its all-time low was $79,425.92 on November 21, 2025. displayed conflicting rank information, listing it as #178 and #8979. [3]

Comparison to Other Tokenized Bitcoin

sBTC's design distinguishes it from other forms of tokenized through its trust model, degree of decentralization, and integration with the base layer. [4]

  • vs. Wrapped Bitcoin (wBTC): While wBTC is backed 1:1 by , it relies on a centralized custodian () to hold the underlying assets. This introduces a single point of failure and requires users to trust the custodian. sBTC, in contrast, uses a decentralized set of economically-incentivized signers, aiming for a trust-minimized model. Additionally, sBTC has no user-facing peg-in or peg-out fees, whereas wBTC operations typically involve fees.
  • vs. Federated Pegs (L-BTC, RBTC): Systems like Liquid's L-BTC and RSK's RBTC use a federated peg model, where a fixed, permissioned group of well-known entities controls the pegged assets. sBTC differs by employing an open-membership model where any STX holder can participate as a signer, and the set of signers is dynamic and rotates with each stacking cycle.
  • vs. tBTC: tBTC also uses an open-membership model with economic incentives for signers. The key difference lies in ' architectural integration with . The sBTC system can read 's state directly without needing Simple Payment Verification (SPV) proofs, it inherits 's full finality, and it processes peg requests as L1 transactions, providing strong censorship resistance.
  • vs. Drivechains (BIP-300): Drivechains are a proposal that would require a soft-fork modification to the protocol. sBTC's design works with as it is, requiring no changes to the base layer. Drivechains also feature a much longer peg-out period (over three months) to enhance security, whereas sBTC's peg-out is designed to happen in approximately one day during normal operation.

참고 문헌.

[1]
www.stacks.co

sBTC landing page

Dec 16, 2025

[2]
docs.stacks.co

sBTC technical documentation

Dec 16, 2025

[3]
coinmarketcap.com

sBTC market data on CoinMarketCap

Dec 16, 2025

[4]
stacks-network.github.io

sBTC technical whitepaper

Dec 16, 2025

[5]
docs.stacks.co

sBTC core features and specifications

Dec 16, 2025

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