Welcome to the Stacking DAO Insider – your go-to source for all things Bitcoin, Stacks, and the future of DeFi!
As pioneers in the Stacks ecosystem, we’re thrilled to bring you exclusive insights, the latest updates, and expert analysis straight from the frontier of decentralized finance.
Whether you’re a seasoned stacker or just starting your journey, this newsletter is packed with everything you need to stay ahead in the world of crypto. Get ready to unlock new opportunities and elevate your DeFi game!
Stacking DAO is the leading liquid staking protocol on Stacks, allowing users to earn consensus rewards from stacking STX tokens while retaining liquidity by minting stSTX.
This enables users to participate in Stacks DeFi activities like trading, lending or providing liquidity, maximizing yield opportunities while still securing the network.
Over the last two cycles, the yield for holding stSTX has averaged 8.71% APY, paid in additional STX tokens. Stack Today!
The future of Bitcoin is here, and it’s programmable. With the completion of the primary Testnet launch, sBTC is setting the stage for Bitcoin’s transformation from a store of value into a dynamic, productive asset.
As a decentralized, 1:1 Bitcoin-backed asset, sBTC is a game-changer for DeFi and Web3. It bridges Bitcoin into applications where it can generate yield, facilitate on-chain lending, and power trading on decentralized exchanges.
In this post, we’ll take an in-depth look at the sBTC launch plan, breaking down the phased rollout strategy and what users can expect at every step of this journey toward unlocking Bitcoin’s full potential.
Bitcoin is the world’s most secure and decentralized digital asset, yet its use has largely been limited to hodling. DeFi has thrived on other blockchains, but bringing Bitcoin into DeFi has long been a challenge due to the technical barriers in integrating it directly.
sBTC changes this by providing a decentralized and trust-minimized way to bridge Bitcoin into the Stacks ecosystem.
With sBTC, users can:
Earn Yield: Deploy Bitcoin into DeFi protocols to generate returns.
Access On-Chain Lending: Use sBTC as collateral for loans or access liquidity.
Trade: Seamlessly swap sBTC on decentralized exchanges.
At its core, sBTC combines Bitcoin’s unmatched liquidity with the programmability of smart contracts, enabling the next wave of innovation in DeFi.
To ensure security, usability, and scalability, sBTC’s launch is structured into multiple phases. Here’s how the rollout will unfold:
Phase 0: Testnet
Status: Completed (November 22, 2024)
Focus: This phase was dedicated to testing the core functionalities of sBTC, including BTC deposits, withdrawals, and the operations of the Signer set.
Outcome: The Testnet ensured that sBTC meets rigorous security and performance benchmarks, setting the stage for a seamless mainnet transition.
Ongoing Work: The sBTC Working Group is onboarding additional Signers and developers to further solidify the ecosystem.
Phase 1: Mainnet - Bitcoin Deposits
Estimated Launch Date: December 17, 2024
Features:
Users will be able to deposit Bitcoin to mint sBTC on the Stacks blockchain.
A deposit cap of 1,000 BTC will ensure controlled testing and security during this phase.
Early depositors will participate in the sBTC Rewards Program, which offers 5% rewards paid in sBTC as an incentive for early adoption.
This phase focuses on onboarding users and builders while thoroughly testing real-world functionality. By limiting operations to deposits only, the protocol minimizes complexity and reduces risks.
Phase 2: Mainnet - Bitcoin Withdrawals
Timeline: February 1–15, 2025
Features:
sBTC holders can redeem their tokens for BTC, enabling seamless withdrawals.
The deposit cap will gradually increase, expanding access to more users.
This phase will prioritize user experience and scalability, building on the success of Phase 1 to unlock the full potential of sBTC.
Phase 3: Open Signer Set + Optimization
Timeline: Following Phase 2
Features:
The Signer set, which secures the protocol, will expand beyond the initial group of 15 community-selected Signers.
Over time, this process will decentralize the Signer set into a fully open and permissionless model.
This phase represents a critical step toward sBTC’s long-term vision: a decentralized and resilient protocol governed by the community.
Deep Dive: Phase 1 and the Bitcoin Deposit Cap
Phase 1 is a major milestone, enabling Bitcoin holders to mint sBTC on mainnet. To ensure security and manageability, deposits will be capped at 1,000 BTC during this phase.
Deposits are accepted on a first-come, first-served basis.
Once the cap is reached, additional deposits will not be processed but can be reclaimed by users.
Rewards Program:
Depositors will earn 5% rewards paid in sBTC, providing a direct Bitcoin incentive to participate early.
This program focuses on simplicity, offering users rewards directly in sBTC without requiring staking or locking funds.
The security and functionality of sBTC rely on its Signer set, a group responsible for managing Bitcoin custody and facilitating deposits and withdrawals.
Initial Setup:
Phase 1 begins with 15 institutional Signers, selected for their technical expertise, reliability, and decentralization potential.
This approach reduces operational risks while ensuring a smooth launch.
Decentralization:
Over time, the Signer set will expand to include more participants, moving toward a fully decentralized, permissionless model.
Security: No Compromises
Security is the foundation of the sBTC protocol. To protect user funds and ensure robustness, sBTC employs a multi-layered security strategy:
Asymmetric Research:
Industry-leading experts provide ongoing vulnerability assessments and protocol improvements.
ImmuneFi Bug Bounty:
A proactive bug bounty program incentivizes ethical hackers to identify and address potential issues.
Third-Party Audits:
Independent audits from top firms offer external validation of the protocol’s security measures.
A user-friendly interface to guide you through the deposit process and explore sBTC-powered applications.
The dashboard is in private beta, with public access launching soon.
Connect a Non-Custodial Wallet:
Use wallets like Leather or Xverse for seamless integrations with Bitcoin and Stacks.
Deposit BTC:
Follow simple instructions to convert Bitcoin into sBTC.
Earn Rewards:
Enroll in the sBTC Rewards Program to earn 5% sBTC rewards on your deposits.
Leverage sBTC in DeFi:
Deploy your sBTC in DeFi applications for trading, lending, and more.
The launch of sBTC is more than a technical milestone—it’s a paradigm shift for Bitcoin. By unlocking its programmability, sBTC allows Bitcoin to play a central role in the DeFi ecosystem.
For Users: Access new financial opportunities without compromising Bitcoin’s security or decentralization.
For Builders: Develop innovative applications leveraging Bitcoin as the base layer of security and liquidity.
For the Ecosystem: Drive the adoption of Bitcoin-backed applications and expand the reach of DeFi.
What’s Next
The journey to fully programmable Bitcoin is just beginning. With the sBTC launch roadmap in motion, the Stacks ecosystem is poised to lead the next wave of innovation in Bitcoin and DeFi.
Stay tuned for updates, and get ready to participate in the evolution of Bitcoin as a productive asset.
On the latest episode of the Stacks DeFi Show, Stacking DAO core contributor Philip discussed the latest product developments from Skullcoin, Xenitron and Zest Protocol. Click here to check out the episode!
Mint stSTX today and earn up to 10% yield on your STX: https://app.stackingdao.com/
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Stacking DAO Cycle updates is the perfect format for the community to explore the latest news and milestones.
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Everything you need to know about sBTC and its yield opportunities
