sBTC Cap Removal: Unlocking Bitcoin Liquidity on Stacks
//: September 9, 2025
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Staff @ Bitcoin L2 Labs
Removing the hard cap unlocks unrestricted inflows and outflows of BTC. Alongside this, the minimum deposit threshold is lowered and the rewards program evolves to long-term sustainable rates, together positioning sBTC as open liquidity, accessible to more users, and ready for developers, partners, and institutions to build at scale.
On September 16, the cap on sBTC will be removed, unlocking open, trust-minimized Bitcoin liquidity on Stacks. Removing the cap brings sBTC from its phased rollout into unrestricted, programmable Bitcoin liquidity, establishing a foundation for broader adoption, institutional participation, and cross-chain growth.
sBTC’s Early Momentum
Since its inception, sBTC has generated strong momentum and investor interest. At the time of writing:
- $545 million USD TVL secured across 7,408 holders.
- 62+ BTC distributed in rewards since launch.
Why Uncapping Matters
With the cap lifted, new opportunities open up across the ecosystem:
- Listings & Earn Programs: With supply no longer limited, exchanges can list sBTC broadly and include it in Earn programs for retail and institutional clients.
- Onramps: Removing the cap clears the way for pathways directly into sBTC, lowering friction for new users and enabling teams to more easily engage in user acquisition strategies.
- Developer Growth: Builders will be able to design and launch products without the constraint of hitting ceilings, encouraging experimentation and innovation.
- Institutional Access: Capital allocators can now onboard directly without concern for supply caps, making sBTC viable for more scalable strategies.
- Partnerships: Integrations with key infrastructure providers such as custodians and cross-chain bridges.
Improved Usability
Alongside the cap removal, the minimum deposit threshold for sBTC will be reduced from 0.01 BTC to 0.001 BTC. Lowering this requirement makes the protocol more accessible to a broader range of users and more developer-friendly for testing and experimentation.
The higher minimum was originally introduced as a safeguard during the phased rollout, ensuring the system scaled gradually under manageable conditions. With those phases complete and the protocol operating reliably at scale, this restriction is no longer necessary. The adjustment removes a barrier to entry and opens sBTC participation to a wider set of investors, developers, and applications.
The higher minimum was originally introduced as a safeguard during the phased rollout, ensuring the system scaled gradually under manageable conditions. With those phases complete and the protocol operating reliably at scale, this restriction is no longer necessary. The adjustment removes a barrier to entry and opens sBTC participation to a wider set of investors, developers, and applications.
sBTC Growth Considerations
The current sBTC rewards program APY reflects both market conditions and incentive programs. As these programs wind down, rates will normalize to more sustainable levels. This shift aligns with the scheduled uncapping and reflect the long-term evolution of the reward program. It’s important to note that sBTC yields remain variable, influenced by the total BTC supplied to the protocol and other factors. These transitions are closely monitored to ensure that the underlying infrastructure remains resilient, regardless of short-term incentives.
Looking Ahead
Enabling New DeFi Opportunities and Protocol Growth
The Stacks ecosystem is exploring ways to unlock scalable, onchain yield strategies for BTC. New products such as dual stacking and sBTC yield vaults are currently in development, with details to follow in the weeks ahead.
The sBTC uncapping is key for unlocking protocol growth. With programmable Bitcoin and BTC locked onchain, Stacks is the leading Bitcoin Layer 2 positioned to scale institutional access, developer adoption, and cross-chain liquidity.
The Stacks ecosystem is exploring ways to unlock scalable, onchain yield strategies for BTC. New products such as dual stacking and sBTC yield vaults are currently in development, with details to follow in the weeks ahead.
The sBTC uncapping is key for unlocking protocol growth. With programmable Bitcoin and BTC locked onchain, Stacks is the leading Bitcoin Layer 2 positioned to scale institutional access, developer adoption, and cross-chain liquidity.
FAQs
What does “uncapping” do?
It removes the 5,000 BTC ceiling, enabling BTC to flow in and out of sBTC without limits.
How does uncapping impact TVL?
Uncapping sBTC enables listings, onramps, partnerships, and institutional access for long-term growth. While inflows are expected to increase over time, it is normal for inflows and outflows to fluctuate as the ecosystem grows.
Why was the cap in place?
The sBTC supply cap allowed the system to scale in phases, with controlled upgrades and responsible exposure. Now that these phases are complete, the system is ready for unrestricted growth.
How does it affect yields?
The current sBTC APY reflects temporary bonus incentives. After September 16, yields will normalize to more sustainable levels and remain variable based on sBTC supply.
What’s next for yields?
New products are in development to offer users opportunities to earn BTC yield in addition to the base-level sBTC rewards.
Why does this matter?
Uncapping positions sBTC as fully open, trust-minimized Bitcoin liquidity. It clears the path for broader partnership support, institutional adoption, cross-chain integrations, and developer growth — solidifying Stacks’ role as the leading Bitcoin Layer 2.
It removes the 5,000 BTC ceiling, enabling BTC to flow in and out of sBTC without limits.
How does uncapping impact TVL?
Uncapping sBTC enables listings, onramps, partnerships, and institutional access for long-term growth. While inflows are expected to increase over time, it is normal for inflows and outflows to fluctuate as the ecosystem grows.
Why was the cap in place?
The sBTC supply cap allowed the system to scale in phases, with controlled upgrades and responsible exposure. Now that these phases are complete, the system is ready for unrestricted growth.
How does it affect yields?
The current sBTC APY reflects temporary bonus incentives. After September 16, yields will normalize to more sustainable levels and remain variable based on sBTC supply.
What’s next for yields?
New products are in development to offer users opportunities to earn BTC yield in addition to the base-level sBTC rewards.
Why does this matter?
Uncapping positions sBTC as fully open, trust-minimized Bitcoin liquidity. It clears the path for broader partnership support, institutional adoption, cross-chain integrations, and developer growth — solidifying Stacks’ role as the leading Bitcoin Layer 2.
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.
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.