Bitcoin’s layer-2 ecosystem is heating up — and Stacks is leading the charge.

STX, the native token of the Stacks network, surged 56% over the past week, outperforming the 100 largest cryptocurrencies. The rally pushed STX to a two-month high of $0.92 on Friday, with a 21% gain in the past 24 hours alone, according to data from CoinDesk. Rising optimism around institutional adoption has fueled the breakout.

The growth comes as Stacks’ DeFi ecosystem posts a massive jump in liquidity. Stablecoin supply on the network soared more than 400% during the first quarter, according to DefiLlama, expanding from roughly $1 million in early January to nearly $7 million — the third-highest growth among blockchains, behind only Morph and Cronos.

Stacks, known as the leading Bitcoin layer-2 platform for smart contracts and decentralized apps, got a major boost this week with new support from BitGo. The digital asset custodian and infrastructure provider announced the integration of sBTC, a synthetic bitcoin asset pegged 1:1 with BTC, giving its institutional clients access to yield opportunities within the Stacks ecosystem.

“With sBTC, we can finally build decentralized financial products that stay true to Bitcoin’s principles — and we’re just scratching the surface,” said Abishek Singh, product manager at BitGo. “BitGo’s $3 trillion in transaction volume and $48 billion in staked assets put us in a prime position to drive the next wave of Bitcoin utility.”

STX serves as the backbone of the Stacks network, enabling smart contract execution, transaction fees, governance, and the proof-of-transfer consensus mechanism, which rewards participants in BTC for locking their STX.

The upcoming release of an sBTC withdrawal feature, slated for April 30, will allow institutions to transition easily between Bitcoin and sBTC. The new functionality could unlock an array of new financial applications, combining Bitcoin’s security with Stacks’ smart contract innovation.