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Staking Circle
Staking Circle
Jun 21, 2024
8 min read

Exploring Bitcoin Staking w/ StackingDAO

Exploring Bitcoin Staking w/ StackingDAO

Leeor presented StackingDao's contribution to the Bitcoin ecosystem through stSTX, a liquid staking token on Stacks. The staking procedure provides benefits such as no minimum deposit and rewards given in STX, with a significant TVL milestone of $100M achieved.

StackingDao is bringing risk mitigation through a distributed signer program and a growing network of trustworthy node operators. Upcoming developments include analytics tools for the Stacks ecosystem as well as details on restaking options following the Nakamoto upgrade. For more info, check out the highlights below.

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Speakers:

Index:

  1. StackingDao Intro
  2. Liquid Staking and Stacks
  3. Stacking Process
  4. Growth Strategy and TVL
  5. Risk Mitigation and Node Network
  6. Additional Notes
  7. Stacks Ecosystem and StackingDao Development
  8. Engagement and Information Channels

1. StackingDao Intro

  • Leeor recently joined StackingDao as the head of growth, previously launched a fund called NovaBlock Capital, worked at Fundstrat, and was with Kraken's BD and partnerships teams:

But for me personally, I've been working professionally in the space since around 2017 or so. I started by launching a fund called NovaBlock Capital. (...) from there I actually moved on to work at Fundstrat, which is a market research firm led by Tom Lee (...) Then I was actually tapped by a recruiter at Kraken to join their BD and partnerships team. So I worked at Kraken for a couple of years on development and partnerships initiatives.

  • After Kraken, joined DRPC, part of the P2P staking family, before moving to StackingDao:

A year ago, I joined DRPC, which is basically a distributed RPC network that's part of the P2P staking family, P2P itself being one of the larger institutional staking providers. (...) And at StackingDaos, and I'm sure we'll get into, you know, we have a signer program where we've onboarded a permission pool of validators to offer just really high performance and help to contribute to the health and decentralization of the Stacks blockchain.

2. Liquid Staking and Stacks

  • Explained the concept of liquid staking, where you can earn rewards for participating in consensus and maintain liquidity:

It's basically the way where you can participate in consensus and earn consensus rewards for proof of stake networks. So obviously Ethereum being the largest while also maintaining liquidity.

  • Introduced stSTX as StackingDao's liquid staking token:

So you're issued a liquid staking token. In the case of Lido, it's staked ETH. In the case of StackingDao, it's stSTX or stacked STX. And the principle is the same. You know, allows you to earn consensus rewards, which in Stacks'case right now is around a 9% yield.

unnamed.png (Source)

  • Stacks is a Bitcoin L2 launched in January 2021, which introduced smart contracts and programmability to Bitcoin while retaining its security properties:

So stacks is the leading bitcoin L2, they launched their mainnet in January 2021. So I mean, although there's been other attempts at creating protocols on Bitcoin to enhance the scalability and functionality of Bitcoin

  • Stacks allows the building of a full range of applications such as DeFi, NFTs, and memecoins, thanks to its smart contract capabilities:

And what it did was it enabled or brought over smart contracts and programmability to Bitcoin. So, you know, if you could build DeFi applications, you could build NFT projects, you can launch mean coins. You can really do all the fun things that, you know, people in Ethereum or Solana or other ecosystems enjoy

  • Upcoming Nakamoto upgrade around August will further align Stacks with Bitcoin and introduce SBTC, a Bitcoin asset on Stacks:

While also another interesting thing about the Nakamoto upgrade is that alongside the Stacks community is going to be launching a tokenized version of Bitcoin called SBTC that will be kind of like the native Bitcoin asset that will be able to be deployed across Stacks applications

3. Stacking Process

  • To stake, users navigate to StackingDao.com, connect their wallet, deposit STX tokens, and receive stSTX:

"So it's super simple for a user. They just go to StackingDao.com. They can connect their wallet and they just deposit STX tokens. And once they do that, they get the stSTX token, which is the liquid staking token

unnamed.png (Source)

  • StackingDao provides the benefit of allowing any deposit amount and facilitates automatic payouts of rewards in STX:

So with StackingDao, another benefit is that you can deposit any amount that you want. You can earn those stacking rewards. We automatically pay it out to the holders in Stacks tokens

  • Stacking on Stacks happens in two-week cycles, with a high threshold for solo stakers at 90,000 STX:

But that's kind of the minimum just to be stacking is you have a two-week minimum. And typically, if you're a solo validator, you're running a node yourself, you have to stack with 90,000 STX tokens, which is quite prohibitive, as you can imagine, for just individual users

  • Rewards come from transaction fees and production of new Stacks tokens, originally paid out in Bitcoin but converted to Stacks for users:

And you actually, if you're stacking STX tokens, you're actually earning not Stacks rewards, but you're earning Bitcoin rewards. So what we do is we convert those Bitcoin rewards to Stacks so that everything stays within Stacks.

4. Growth Strategy and TVL

  • Achieved a rapid TVL growth to $100M, emphasizing the success of their strategies:

I think like right now where things stand, we're in a pretty privileged position. Our growth has been very strong. So we launched just in December of last year. So we're about six months into our journey. But we were able to amass 100 million TVL faster than any other liquid staking project that really ever existed.

unnamed.png StackingDao TVL Growth in 2024 (Source)

  • Actively seeking partnerships and community engagement to sustain growth:

"I'm always looking for new partnership opportunities with other projects in the Stacks ecosystem, or perhaps even with other Bitcoin L2s.

5. Risk Mitigation and Node Network

  • Mentioned the distributed signer program as their main risk mitigation strategy:

Through our distributed signer program, that is kind of the biggest risk mitigation initiative that we've undertaken. And actually through that, by onboarding really large and robust and enterprise-grade node operators. We're able to receive or generate high rewards on behalf of our users. Because they have the best performance, they have limited downtime, they're actually able to earn rewards in the best way for their users

  • Collaborated with reputable node operators like Blockdaemon, Chorus one, and Kiln:

So today we've onboarded seven of these larger node operators into our program. These are folks like, I'm sure, some household names you've heard of like Blockdaemon, Chorus one, Kiln, Restake. And we're… actually in conversation, pretty, you know, progressive conversation with about half a dozen others

unnamed.png Validators on StackingDao (Source)

6. Additional Notes

  • stSTX rewards auto-compound, offering an advantage for investors:

So what we like to say is that if you're bullish on Stacks and you want to express a long position or a bullish view on stacks, StackingDao really is the best way to do that because based off of this mechanism, your return basically auto compounds, your rewards auto compound in the STX native token.

  • Plans include leveraging node operator networks to increase stSTX awareness and adoption:

We're also going to be leaning on them to tap into their communities to just generate more awareness about StackingDao and get more stSTX through the door, hopefully.

7. Stacks Ecosystem and StackingDao Development

  • Leeor aims to make StackingDao the analytics hub for the Stacks ecosystem:

What I can share is we actually want to be kind of like the analytics hub across the Stacks ecosystem. So we're actively working on analytics dashboards and an analytics page to show more about the actual like stacking or validator process

  • They're developing dashboards and an analytics page to show the stacking or validator process with details on largest validators, Bitcoin rewards, and associated fees:

Who are the largest validators? You know, how many? How much Bitcoin rewards are they earning? What are the fees associated with that? So we want to kind of be the hub for all things stacking across the Stacks ecosystem. And so just stay tuned for more exciting updates on that."

  • StackingDao aims to address data and analytics gaps within the Stacks ecosystem, given its early developmental stages:

Just because we identified that data and analytics is kind of a big point that's not quite built out yet for Stacks, given we're still pretty early here for the development of our ecosystem. So we're just very mindful of some of the holes that we need to help fill.

  • Leeor referred to upcoming restaking opportunities post-Nakamoto upgrade, with more details on SBTC and Bitcoin restaking opportunities to come:

And something else as well, I think will be very interesting to look at as well. Like clearly like restaking has been a big meta across this bull market. And I think especially after the Nakamoto upgrade is live, there'll be a lot of restaking opportunities, particularly with SBTC and Bitcoin

8. Engagement and Information Channels

  • Leeor, head of growth, keeps DMs open for questions about Stacks and StackingDao:

So, you know, please follow myself as the head of growth. My DMs are open. So always happy to answer any questions or talk about.

  • Leeor suggests depositing idle Stacks at StackingDao for auto-compounding rewards:

And something else as well I'd like to mention, if you have any idle stacks in your wallets, please don't hesitate to deposit on StackingDao to earn auto-compounding rewards.

  • Leeor mentioned stSTX as the best way to express a bullish view on Stacks, not just holding STX:

stSTX is the best way to express a bullish view on stacks.

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