Stacking DAO Basics
The Problem Stacking DAO solves
Stacking is a bad experience. And it’s even worse with the Stacks Nakamoto upgrade now live.
Stacking cycles last 2 weeks, leading to long unlock and restacking windows
Stacking doesn't generate yield immediately. It can take 2 weeks until users start seeing yield.
Minimum requirement of locking ~90,000 STX
With the Stacks Nakamoto upgrade, stackers now need to run a node with liveness to stack
What is Stacking? Stacking is locking STX to participate in Stacks Consensus. You can compare it to ETH staking. Today, 400m STX stacked with a yield of 9% or more. Follow live stats on stacking.club.
The Solution
A liquid stacking protocol that gives users an auto-compounding tokenised representation of stacked STX (stSTX). Think Lido on Stacks.
No more waiting 2 weeks to unstack. With stSTX-STX pools on a DEX, users can trade back to STX anytime
Immediate yield. Users start earning yield from the moment they deposit.
No more 90k STX minimum requirement to stack, any amount can be stacked
No requirement for users to run nodes after the Stacks Nakamoto upgrade, StackingDAO is specialised in running nodes with liveness
stSTX has the potential to become a key primitive for the nascent Bitcoin DeFi ecosystem, especially as collateral. Borrowing against stSTX will be the most tax efficient way to get liquidity against STX for STX holders.
Stacks has been live since 2021, why has liquid stacking not taken off before? Liquid stacking only became technically possible recently. Stacks smart contracts couldn’t perform continuous stacking before April 2023.
Demand for Stacking delegated solutions is set to increase strongly. With the 2024 Stacks Nakamoto upgrade, Stacks users will have to run a node with liveness to stack. This is a new requirement and will push most stackers towards custodial delegated stacking solutions.
Because of these two reasons, Stacking DAO was awarded a grant by the Stacks foundation to research and build a liquid stacking protocol.
How Stacking DAO compares to other Stacking solutions
Custodial delegated stacking pools. Examples are OKX, Coinbase Custody, Bitgo and Copper. OKX and Coinbase Custody are live today. Custodial stacking pools take full custody of STX and offer an institutional UX. These pools don’t offer a tokenised representation of stacked STX
Community delegated stacking pools. Examples are Xverse pool and Friedger pool. These pools allow users to stack their STX and earn BTC or STX rewards. These pools don’t offer a tokenised representation of stacked STX.
| - | Custodial pool | Community pool | Stacking DAO |
|---|---|---|---|
Non-custodial | ❌ | ✅ | ✅ |
Tokenised representation of Stacked STX (stSTX) | ❌ | ❌ | ✅ |
Autocompounding STX yield | ❌ | ❌ | ✅ |
Immediate Stacking Yield | ❌ | ❌ | ✅ |
Stacking DAO Business model
Stacking DAO charges a 5% commission on Stacking yield to keep the lights on.
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