The Ultimate Guide to STX Stacking

Stacking is the core incentive mechanism that powers the Stacks blockchain and connects it to Bitcoin. But how does it work, and how can users benefit?

In this guide, you will learn everything you need to know about STX Stacking and how Stacking DAO compares to other options.

But first, what is STX Stacking?‍
Stacking involves holding and temporarily locking STX on the Stacks network - similar to staking ETH on Ethereum or SOL on Solana. What sets STX Stacking apart is that it rewards users with native BTC on Bitcoin L1.

Solo Stacking requires locking around 90,000 STX and running a node, which isn’t feasible for many users. Instead, they often join community stacking pools, which allow them to participate with as little as 100 STX and earn BTC or STX rewards at the end of each cycle (about two weeks).

Another option is Liquid Stacking, where users deposit STX on a protocol and get a tokenized representation of stacked STX (e.g. stSTX and stSTXbtc) that can be used in DeFi while earning the Stacking yield at the end of each cycle (as the deposited STX are used for Stacking). Then, users can swap or unstack the tokenized representation for STX at any time.

Native Stacking or Liquid Stacking?

The choice between native and liquid stacking ultimately comes down to time horizons and flexibility choices.

For instance, Native Stacking makes perfect sense for those with a long-term outlook and no exposure to smart contract risk. Since yield takes 2–4 weeks to accumulate, depending on the cycle timing, and unstacking may require another full cycle, users must be sure they don't plan to stop stacking for a long time - otherwise, you’re losing out on too much yield.

Liquid Stacking is ideal for those seeking flexibility. Users can access their STX anytime, choose to earn BTC or STX yield, receive immediate yield without switching costs (exclusive to Stacking DAO), and they can use liquid stacking tokens in DeFi to earn extra yield. This increase in flexibility often comes with slightly higher fees respect to native stacking.

Before deciding between the two, it's best to have a full overview of the staking solutions in the Stacks ecosystem.

Liquid Staking Solutions

The core benefits of Liquid Stacking over native stacking are clear—users can earn Stacking yield while using liquid tokens (e.g., stSTX and stSTXbtc) in DeFi and can switch back to STX anytime.

But what makes Stacking DAO’s Liquid Stacking options the best in the ecosystem?

1)Immediate Yield: Thanks to the protocol’s design, stSTX and stSTXbtc offer immediate yield with zero wait time. This means users switching from other Stacking pools start earning yield right away without losing a cycle’s rewards, as tokens can't be added to a Stacking Cycle that is already ongoing.

This is possible because when users deposit STX during a cycle, they still earn yield for that cycle, even if their tokens aren’t actively used in the Stacking process.

2)Decentralized Signer Set: Stacking DAO delegates STX to 10+ signers/validators, including enterprise-grade staking providers like Luganodes and Chorus One, which have a proven track record of optimal uptime and managing billions in stacked assets.

While the delegated STX remains fully controlled by Stacking DAO’s smart contracts, this approach strengthens Stacks network security and decentralization.

3)Extensive DeFi Integration: stSTX is the most integrated asset in DeFi, with over 50% deployed across Stacks DeFi protocols. Users can lend, borrow, provide liquidity, or swap stSTX for other tokens on DEXs. Meanwhile, stSTXbtc is currently integrated with Zest for lending, with more use cases on the way.

How do stSTX and stSTXbtc differ?

• stSTX: stSTX is the tokenised representation of stacked STX, which can be used across Stacks dApps while earning up to 10% APY in auto-compounding STX rewards.
• stSTXbtc: stSTX is a second liquid stacking token backed 1-to-1 with STX, and holders receive sBTC streamed directly to their wallet at the end of each stacking cycle.

stSTX continues to be the best way to be long STX - also thanks to the auto-compounding rewards feature - while stSTXbtc might appeal to investors that are slightly more risk-averse, which prefer sBTC yield. Additionally, users earn points for holding the tokens and receive a points boost when using them in DeFi.

Finally, for those looking to seamlessly swap between stSTX and stSTXbtc, one-click swaps on Stacking DAO allow them to do so without unstacking and with no slippage.

Native Stacking Options

Stacking DAO remains the best option even for the Native Stackers who want zero exposure to smart contract risk and are committed to their STX bags for the long term (given the two-week unstacking period and yield loss when switching pools)

Stacking DAO has the only native Stacking pool in the ecosystem with 0% fees, and minimizing yield loss makes a huge difference over the long term. On top of that, users accrue 1 point for each 2 STX deposited with the native stacking option.

Conclusions

The Stacks community has diverse preferences when it comes to Stacking. Some prefer earning BTC, while others choose STX. Some seek extra yield through Liquid Stacking tokens via DeFi, while others stick to native stacking options.

Stacking DAO recognizes these needs and has developed solutions to accommodate all Stackers, aiming to become the ultimate hub for everything related to Stacks and Bitcoin Stacking.

Stacking DAO Details:

Mint stSTX & stSTXbtc today and earn up to 10% yield on your STX: https://app.stackingdao.com/

Follow us on Twitter to always be up to date on Stacking DAO: https://twitter.com/StackingDao

For any questions or support, join our Discord community: https://discord.gg/KEQfXJnJYj