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Update bitcoin-rollups.md
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muneeb-ali authored Aug 9, 2023
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Expand Up @@ -15,7 +15,7 @@ This image broadly means developers can build sovereign rollups on Bitcoin today

Stacks is not really a sidechain, given the Nakamoto release (see [latest Stacks paper](https://stacks.co/stacks.pdf)), Stacks layer will follow Bitcoin finality with 100% Bitcoin hashpower. Also, the Stacks layer has various other direct connections to Bitcoin L1 that sidechains typically do not have -- see [this FAQ](https://github.com/stacks-network/stacks/blob/master/stacks-l2.md) for details if Stacks is a Bitcoin L2 or not; the short answer is it depends on the definition you use.

Stacks with the Nakamoto release will have Bitcoin-grade reorg resistance. The designers of the Nakamoto release have decided to wait for 150 blocks before Bitcoin finality kicks in; this is mostly done to allow short-term forks to be resolved at the Stacks level. This design also means that most Maximal Extractable Value (MEV) action happens on the Stacks layer side and not on the Bitcoin side. There is always a fear of MEV incentives messing with Bitcoin mining, and the Stacks layer explicitly attracts most MEV activity to happen on the Stacks layer vs. Bitcoin L1 (the assumption here is that most MEV activity will occur within 150 blocks). Changing the variable from 150 to 6 blocks is trivial technically and can be configured as needed. Sovereign rollups effectively use a variable of 0 blocks and work similarly to the Stacks layer for reorg resistance.
Stacks with the Nakamoto release will have Bitcoin-grade reorg resistance following Bitcoin finality (typically people wait 6 blocks on Bitcoin). This is very similar to reorg resistance of sovereign rollups.

For data availability, Stacks publishes only hashes of data to Bitcoin every Bitcoin block instead of posting all the data to Bitcoin. The designers separate data validation from data availability. Bitcoin is used for data validation, which is important. Bitcoin L1 and only Bitcoin L1 can confirm whether a presented Stacks layer history
is valid. The block data itself is kept outside of Bitcoin L1 for scalability. As long as STX has any market cap, there is an incentive for Stacks miners to keep copies of the Stacks layer ledger around. Even if a single copy of the Stacks ledger exists, it can be independently verified against Bitcoin L1. Sovereign rollups publish all data to Bitcoin L1, giving both Bitcoin-grade data validity and data availability. The potential downside is scalability at Bitcoin L1, but the hope is that rollup data will not become very large.
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