sBTC's 2nd Cap: Tripling Capacity and Paving the Way for Withdrawals

Bitcoin L2 Labs is pleased to announce the upcoming launch of the 2nd sBTC deposit cap, set for February 25th, 2025. This 2nd cap follows the successful initial launch of sBTC on December 17, 2024, which saw the 1,000 BTC deposit cap reached rapidly and introduced Bitcoin deposits.

Shortly after the 2nd cap, the second phase of the sBTC rollout will follow in March. This phase introduces Bitcoin withdrawals. Read more about the rollout plan for sBTC in this post.

sBTC's 2nd Cap

Following the success of Cap-1, we are opening Cap-2 on February 25 for more people to participate.

• BTC Increase: An additional 2,000 BTC will be available for deposit for Cap-2. As a result, the total sBTC minted will not surpass 3,000 BTC during this phase.
• Minimum Deposit: As with Cap-1, sBTC will have a minimum deposit amount of 0.01 BTC. This is to ensure the system does not get spammed by many smaller transactions. We are exploring reducing the deposit minimum for future phases.
• First Come, First Serve: sBTC deposits will be open to the public starting at 10am ET on February 25th.

Note: sBTC currently supports deposits only. sBTC withdrawals are on track to launch in March 2025. After this point, sBTC can always be redeemed for BTC.

How to Earn sBTC

The sBTC rewards program is a limited time offering to earn bonus rewards on your sBTC. The program is Bitcoin in, Bitcoin out; users only need to hold sBTC to earn sBTC rewards — no points programs, no rehypothecation, just Bitcoin.

Where does the yield come from?

‍Contributors in the Stacks ecosystem have set aside 50M STX for this initiative and the rewards are variable based on factors such as: (1) the amount of STX in the pool (2) the average rate of stacking yield from PoX (driven primarily by the STX/BTC conversion rate) and (3) the amount of BTC enrolled in the program.

Note: The actual rewards rate is variable based on aforementioned factors, and neither BitcoinL2 Labs nor other entities in the Stacks ecosystem make any guarantees on the actual yield users receive.

How to Participate

1. Visit the sBTC Dashboard: The user interface will guide you through the deposit process.
2. Connect your wallet: See below for a list of supported wallets for this phase.
3. Deposit BTC: Follow the instructions to deposit Bitcoin and receive sBTC in return.
4. Earn Rewards: Begin earning BTC rewards immediately after your deposit is processed by heading to the rewards website. Users must enroll in the program by March 5 to be eligible for the first rewards cycle.
5. Deploy sBTC in DeFi: Visit one of the featured sBTC applications to swap, lend, or borrow against your sBTC onchain while earning rewards.

Supported Wallets

• Leather - users can connect their Leather wallet to the dashboard to deposit sBTC or bridge directly in the Leather wallet.
• Xverse - users can connect their non-custodial Xverse wallet and deposit BTC via the dashboard.
• Ledger - users depositing through Ledger should connect to the Ledger wallet directly in the dashboard.
• Asigna - users seeking wallets with multisig support should consider Asigna.

BitcoinL2 Labs is actively integrating new wallets into the bridge including OKX Wallet, Unisat and ForDeFi. We will update this page as new wallets become available.

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FAQs

Why is there a deposit cap?

‍During phase 1, sBTC will have a deposit cap. This gradual rollout ensures developers have more time to improve the system and user experience improvements prior to opening sBTC for all users.

‍Where do the sBTC rewards come from?

‍The sBTC Rewards Program is powered by a group of stackers “Stacking” STX. When Stacking STX, Stackers receive BTC through Stack’s Proof-of-Transfer (PoX) consensus mechanism. For example, over a given 2-week period, the Stacks protocol has historically distributed around 10% APY to Stackers, paid in BTC.

To enable the sBTC Rewards Program, these stackers contribute the corresponding Proof of Transfer BTC rewards to the sBTC incentive pool. This BTC from the incentive pool is directly deposited into a smart contract that bridges the BTC to sBTC and distributes the rewards pro rata to sBTC holders.

‍What security measures have been put in place to ensure sBTC is safe?

‍sBTC is always backed 1:1 against BTC, and it’s verifiably secure through threshold cryptography. sBTC removes the need for 3rd party custodian or trusted setup. Instead, BTC is secured by a decentralized signer set.Partnerships with top-tier security experts have been established to ensure the protocol is fortified at every level:

1. Asymmetric Research: Known for their rigorous research and protocol audits, Asymmetric brings security expertise to sBTC to identify and mitigate potential vulnerabilities.
2. ImmuneFi: A robust bug bounty program incentivizes ethical hackers to uncover and address potential issues, adding an additional layer of defense.
3. 3rd Party Audits: Independent audit reports are in progress for additional security reviews, ensuring the protocol is thoroughly vetted by external experts.

Check out the sBTC home page here for more information and updates as we move closer to the launch of Phase 2 and beyond.

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Disclaimer

This blog post is for general informational purposes only and should not be construed as advice or guidance. The information provided has not been tailored to any specific individual, facts, or circumstances. Readers are cautioned that the content may become outdated or inaccurate over time and should not be relied upon without conducting their own independent verification and investigation. BitcoinL2 Labs assumes no obligation to update, correct, or revise any information presented in this blog post.BitcoinL2 Labs does not own, control, manage, or profit from the sBTC token, its ecosystem, or any associated projects. Additionally, BitcoinL2 Labs does not manage sBTC, its rewards program, or any related activities. References to sBTC in this blog post do not constitute recommendations, investment advice, or an invitation to engage in cryptocurrency-related activities.The sBTC rewards program operates independently through decentralized smart contracts. Participation in the program is entirely at the discretion and responsibility of individual users. Users must affirmatively enroll in the program. **Readers are strongly encouraged to consult qualified financial, legal, or tax professionals before participating in sBTC or any cryptocurrency-related activities. BitcoinL2 Labs disclaims all liability for any loss, damage, or consequences resulting from reliance on this blog post or engagement with cryptocurrency-related activities.

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