StackingDAO
  • The basics
    • Stacking DAO Overview
    • The Importance of Liquid Stacking
    • Immediate Yield with Stacking DAO
    • Points
  • The Stacking DAO app
    • stSTX - Liquid Stacking with STX Rewards
      • stSTX Basics
      • Depositing & Switching for stSTX
      • Withdrawing from stSTX
    • stSTXbtc - Liquid Stacking with BTC rewards
      • stSTXbtc Basics
      • Depositing & Switching for stSTXbtc
      • Withdrawing from stSTXbtc
    • Native Stacking with BTC Yield
      • Native Stacking with BTC Yield Basics
      • Depositing STX in Native Stacking Pool
      • Withdrawing STX From Native Stacking Pool
    • Signer Delegations & Analytics
    • What are the risks of using Stacking DAO?
    • Frequently Asked Questions
  • Core Contracts
    • Stacking DAO Core V4
    • Signer Onboarding
  • Miscellaneous
    • Essential links
    • Restricted countries
    • Disclaimer
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  • The Problem Stacking DAO solves
  • The Solution
  1. The basics

The Importance of Liquid Stacking

PreviousStacking DAO OverviewNextImmediate Yield with Stacking DAO

Last updated 2 months ago

The Problem Stacking DAO solves

Stacking is a bad experience. And it’s even worse with the Stacks Nakamoto upgrade now live.

  1. Stacking cycles last 2 weeks, leading to long unlock and restacking windows

  2. Stacking doesn't generate yield immediately. It can take 2 weeks until users start seeing yield.

  3. Minimum requirement of locking ~90,000 STX

  4. 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 website.

The Solution

A liquid stacking protocol that gives users an auto-compounding tokenised representation of stacked STX (stSTX and stSTXbtc). Think Lido or Jito on Stacks.

  1. No more waiting 2 weeks to unstack. With stSTX-STX pools on a DEX, users can trade back to STX anytime (for both stSTX and stSTXbtc)

  2. Immediate yield. Users start earning yield from the moment they deposit.

  3. No more 90k STX as the minimum requirement to stack; any amount can be stacked

  4. No requirement for users to run nodes after the Stacks Nakamoto upgrade; StackingDAO is specialised in running nodes with liveness

stSTX and stSTXbtc have the potential to become a key primitive for the nascent Bitcoin DeFi ecosystem, especially as collateral. Borrowing against liquid stacking tokens 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.

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