Who Uses Bitcoin DeFi?: Insights From sBTC's Research (Part 1)

This week in sBTC: June 2, 2023

Dear Bitcoiners,

This week, the sBTC go-to-market group has been working on product research to improve the Bitcoin DeFi experience for users and developers.

For sBTC to be successful, it’s crucial that we understand user pain points and design solutions that meet their needs better than alternatives.

Here’s a summary of the work so far:

  • Four conversations with Stacks product owners to uncover assumptions and pain points.

  • Six conversations with people in Stacks, Bitcoin and Ethereum ecosystems to inform messaging guidelines.

  • Competitive research and product reviews to understand what’s on the market.

Over the next few weeks, we’ll be conducting user interviews and plan to publish a report with our findings. Below, I’ll go into more detail on our initial takeaways.

Target User: who is likely to care about our product?

The first question to ask when building a product is who are we building for? Two primary audiences we consider for sBTC are Bitcoin Holders and DeFi Users.

Our initial assumption is that Bitcoin holders and DeFi users have different views and motivations. For example, the former optimizes for security and sovereignty while the latter optimizes for experimentation and collective ownership. This is an assumption we will test through user interviews and research.

The rise of Ordinals has shown that there is a category of users who hold Bitcoin passively, but use Ethereum and Web3 protocols daily. This has revealed demand for productive use cases on Bitcoin, which was echoed in the latest State of Stacks Messari report.

Both user categories would like to earn yield on their Bitcoin with minimal friction; however, the value proposition for each group might be slightly different. With Bitcoiners, we may want to highlight the non-custodial and safety aspects of sBTC; whereas Web3 native users may care more about the competitive yield opportunities.

Early research suggests that Web3 native users are more likely to experiment with new protocols, whereas Bitcoin holders may be skeptical if there isn’t a “Bitcoin-first” experience (ie using a separate network and token).

We’ll publish more insights in the coming weeks and months as we conduct more interviews and test the UX flows for sBTC products.

Signing Off,


Special thanks to Elena Giralt for contributing to this post.

💻 Engineering Updates

  • Blockchain ⛓️

    • sBTC alpha testing is progressing.

    • Upgraded Alpha Stacks node to 2.4 consensus.

    • Fixed several minor bugs.

    • Currently lacking a deployed bridge UI.

    • Initial test-vectors for wrap/unwrap with commit-reveal are in place.

  • Clarity Eng 🔭

    • Major review of sbtc-stacking-pool.clar by Fernando and Marvin.

  • Crypto Eng ⚙️

    • Implemented Display and Debug for remaining p256k1 objects.

    • Updated frost-coordinator integration test to use code objects not binaries (link)

      • Improved code coverage from 49% to 65%.

    • Fixed a signature verification bug.

    • Discovered an inconsistency in HashMap iteration.

  • Stacks Signer 🖊️

    • Received feedback from the Clarity workstream on the signer diagrams.

    • Organizing meetings to finalize sBTC transaction flow design.

    • Initial Web UI for Stacks Signer is available for feedback.

    • Making progress on Android UI.

    • Received feedback on the WARP API and planning changes.

  • Stacks Grants 💰

    • Latest bridge work is complete here.

    • Working on implementing the design.

    • Added an API call to pull in balances for users' addresses.

⚒️ Go-To-Market Updates

  • New sBTC website is live with a refreshed brand and pitch deck.

  • User research interviews starting next week. Aligning with engineering on Bridge product testing.

  • Planning sBTC pitch competition mid-June. Stay tuned for details.

🌍 Around the Ecosystem