> For the complete documentation index, see [llms.txt](https://docs.stackingdao.com/stackingdao/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.stackingdao.com/stackingdao/the-stacking-dao-app/stbtc-liquid-btc-staking-with-btc-rewards.md).

# stBTC - Liquid BTC staking with BTC rewards

<figure><img src="/files/90ghrcoxxIdYcpEcLE2T" alt=""><figcaption></figcaption></figure>

stBTC is the tokenised version of Staked Bitcoin, designed to earn native Bitcoin yield in auto-compounding sBTC rewards.\
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Users deposit BTC on Bitcoin L1 or sBTC on Stacks L2 to mint stBTC, which increases in value automatically as Bitcoin Staking are earned (stBTC = deposited BTC + rewards).

stBTC can be deployed across DeFi protocols to generate additional yield or points, and can be redeemed back to sBTC at any time.

stBTC brings [Stacks Bitcoin Staking](https://www.stacks.co/bitcoin-staking) yield on-chain, extending Stacking DAO's stacking infrastructure from STX to BTC itself. In development with Stacks Labs supporting Stacking DAO to build it, stBTC joins stSTX and stSTXbtc as the third liquid stacking token from the largest staking protocol on Stacks.

stBTC is built to be put to work across Stacks DeFi. It can be posted as collateral on [Zest Protocol](https://app.zestprotocol.com/), will have pairs on Stacks DExes, and so on.\
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You can mint and redeem stBTC through the Stacking DAO app, or directly through the on-chain core contract (see [stBTC: Stacking DAO Core](broken://pages/464def20657c3988e8cf70920d8b64e0a5ce136a)).

## How it works

* **Deposit** — Deposit sBTC of BTC into Stacking DAO and receive stBTC at the current stBTC/sBTC ratio.
* **Yield** — The deposited sBTC backs Stacking DAO's PoX-5 bond positions, which earn Bitcoin rewards. Rewards are compounded back into the backing, so the stBTC/sBTC ratio grows over time.
* **Withdraw** — Redeem stBTC for sBTC (principal + yield), either via the standard cooldown withdrawal or instantly against idle liquidity for a small fee.

{% hint style="info" %}
No STX postition is required to mint stBTC and earn BTC yield. Staked BTC in the Bitcoin bond is paired by STX that is backing stSTX(btc) in exchange for a share of Bitcoin Staking rewards.
{% endhint %}

## Technical design

* **PoX-5 and the signer-manager.** stBTC is built on PoX-5, the Bitcoin Staking primitive that replaces the pools and delegation of PoX-4. Staking runs through a signer-manager: a contract Stacking DAO deploys and registers, which stake sits behind. PoX-5 recognises the signer-manager as the signer and directs the pooled sBTC rewards to it.
* **sBTC bonds.** Staked Bitcoin is committed through a PoX-5 bond. PoX-5 allows one bond per account, and bonds can overlap, up to six active at once, so Stacking DAO runs several staking accounts behind the signer-manager to stay continuously deployed. Individual sBTC bonds lock for twelve cycles, longer than the roughly one-cycle unlock on the STX products.
* **Reward flow.** Each cycle, Stacking DAO claims sBTC from the PoX-5 waterfall and distributes it. A commission goes to the protocol and validators, and the remainder is distributed to stBTC holders.
* **Liquidity.** Withdrawals mirror the stSTX model: an instant withdrawal from the reserve buffer for a small fee, or a cooldown of roughly one cycle through a withdrawal NFT. Stacking DAO refills the buffer by recalling bonded sBTC on demand, with no cycle-timing restriction, giving stBTC a liquidity advantage over stSTX and stSTXbtc products.

## Using stBTC across Stacks DeFi

stBTC is built to be put to work across Stacks DeFi. It can be posted as collateral on Zest Protocol and integrated by other protocols, so you can keep earning Bitcoin yield while your stBTC stays productive elsewhere.

For contract-level integration details, see [stBTC: Stacking DAO Core](broken://pages/464def20657c3988e8cf70920d8b64e0a5ce136a).