> 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/ststx-liquid-stx-staking-with-stx-rewards/ststx-basics.md).

# stSTX Basics

Learn how stSTX compounds STX staking rewards while remaining usable across Stacks DeFi.

**stSTX** is a liquid staking token backed by STX. Users deposit STX and receive stSTX at the current conversion rate. Stacking rewards are compounded into the assets backing stSTX. As rewards accrue, each stSTX represents more STX.

How stSTX works: 1) Deposit STX through Stacking DAO. 2) Receive stSTX at the current conversion rate. 3) The underlying STX participates in staking. 4) Rewards are compounded into the assets backing stSTX. 5) The stSTX-to-STX value ratio increases as rewards accrue. The token balance in a user's wallet does not need to increase for the position to compound.

Using stSTX — stSTX remains transferable and can be used across supported Stacks DeFi applications while the underlying position earns. Using stSTX in another application introduces that application's own smart-contract, liquidity, and market risks.

Fees and withdrawals — Liquid staking introduces smart-contract exposure and a fee on staking rewards. Current conversion rates, fees, withdrawal methods, available liquidity, and estimated timing are shown in the Stacking DAO app.

**Key features:**

* **Non-custodial** – Users stay fully in control of their assets
* **Auto-compounding STX yield** – Rewards are automatically reinvested into the smart contracts behind stSTX
* **Seamless staking** – No two-week unstaking delay, no 90k STX minimum, no need to run a node, and instant yield on deposit
* **Most integrated Stacks asset** – Use stSTX across major DeFi protocols including Zest, Bitflow, Velar, Arkadiko, and Hermetica
* **Flexible stSTXbtc<>stSTX switching** – Easily swap between stSTX and stSTXbtc without needing to unstake. One-click swaps are available directly on StackingDAO.

{% hint style="info" %}
Because stSTX auto-compounds and staking rewards are distributed continuously, the value of stSTX doesn’t jump all at once at the end of each staking cycle.

Instead, the stSTX ratio increases gradually over the two-week cycle, updating roughly every 70 Bitcoin blocks (about every 12 hours).
{% endhint %}