# What is sBTC?

Dive into the world of sBTC, a new solution for bringing DeFi to Bitcoin and enhancing its network scalability, all without compromising decentralization. This primer is designed to provide a foundation for understanding the principles behind sBTC and Stacks.

## Introduction to sBTC

sBTC is a 1:1 pegged representation of Bitcoin on the Stacks layer. sBTC operates under a fully decentralized framework, overseen by an open-membership group of signers. This approach guarantees that the pegging mechanism for sBTC remains transparent and open to everyone.

{% hint style="info" %}
Learn more about sBTC by visiting the [official website](https://sbtc.tech).
{% endhint %}

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## DeFi Using Current Solutions

The majority of DeFi takes place on networks other than Bitcoin, like Ethereum. For Bitcoin holders looking to engage in DeFi, they often need to transfer their assets onto these platforms. However, directly moving Bitcoin to these networks in a decentralized way is challenging due to Bitcoin's limited scripting capabilities.

Currently, the most common method is using wrapped versions of Bitcoin, like wBTC. Yet, this approach requires reliance on third parties, such as custodians or federations, introducing risks like potential censorship and insolvency.

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## **DeFi Using sBTC and Stacks**

sBTC provides Bitcoin holders a decentralized way to tap into DeFi through a pegged representation of Bitcoin. Governed by a set of open-membership signers, these entities are economically motivated to mint and redeem sBTC.

Additionally, sBTC operates on the Stacks layer, which is designed to provide smart contract capabilities for Bitcoin, secured by Bitcoin finality. Leveraging both sBTC and Stacks offers a decentralized gateway for Bitcoin to access DeFi, bolstered by the security of both an open-membership framework and the Bitcoin network.

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## Stacks Explained

Stacks is a smart contract layer tethered to the Bitcoin blockchain, allowing the creation and execution of smart contracts that benefit from Bitcoin's security and immutability. The native cryptocurrency of this layer is Stacks (STX), which is utilized for transaction fees and smart contract execution.

{% hint style="info" %}
Learn more about Stacks by visiting the [official website](https://stacks.co).
{% endhint %}


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