BitGo Launches Support for Bitcoin L2 Stacks and sBTC

Digital asset services infrastructure provider BitGo has launched support for the Bitcoin layer2 Stacks network and its new token standard, sBTC, to enhance BTC functionality with stacking capabilities.

According to a press release sent to CryptoPotato, BitGo will join the Stacks network as a signatory, contributing to blockchain consensus and block production.

BitGo integrates support for stacks

The alliance between BitGo and Stacks allows users of the former to grow their Bitcoin holdings without lending their assets. They can generate bitcoin (BTC) rewards in their wallets using Stacks’ sBTC.

sBTC is a 1:1 Bitcoin-backed decentralized asset created to improve the programmability of Bitcoin, and BitGo will facilitate deposits and withdrawals of the Stacks asset. As a signatory to Stacks, BitGo will enable conversion between BTC and sBTC on the Bitcoin Layer 1 and Layer 2 networks.

Users who want to create sBTC must deposit an equal amount of BTC into a Bitcoin blockchain script controlled by BitGo or other signatories. BitGo will then mint the sBTC and move it to users’ addresses. The infrastructure provider follows a similar process when users convert their sBTC to BTC by initiating a peg-out transaction and sending the exchanged BTC to the appropriate addresses.

BitGo Senior Product Manager Daniel Du said, “BitGo is excited to support Stacks in expanding its smart contract capabilities and decentralized applications for builders and institutions alike. We are proud to provide custody qualified regulated and STX stacking, and we look forward to collaborating with them on their future developments.”

Based on Bitcoin

The latest development comes as developers and the Bitcoin community look to unlock the potential of the leading crypto network. With developers looking for new ways to build on top of Bitcoin, the total locked value of the network has grown 7x to over $2.2 billion. BitGo believes that its participation as a Signer for Stacks would encourage Bitcoin layer2 developers to innovate more.

“This move underscores the critical role that Bitcoin L2s, with Stacks foremost among them, will play in expanding the Bitcoin ecosystem and driving future innovation,” said Jonathan Sadlowe, general partner at Gossamer Capital, a fund of early-stage venture capital that invests in the blockchain ecosystem.

Investors and institutions are also looking to tap into Bitcoin’s potential. Several entities have increased their allocation to Bitcoin-based projects through direct investments and the launch of accelerator programs aimed at Bitcoin building teams.

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