Stacking DAO Ignites Bitcoin DeFi
A Look Into Stacking DAO, A Stacks DeFi App With Over $100M TVL
by Grant Nissly on April 1st, 2024
Liquid staking has emerged as one of the largest DeFi sectors, with over $40 billion in total value locked across the industry.
Now, it’s beginning to power the Bitcoin DeFi ecosystem.
Stackers earn native BTC yield when stacking STX. As a result, DeFi in the Stacks ecosystem has suffered from what Muneeb has called the “black hole effect.” If Stackers can earn BTC when stacking STX, there is little incentive to deploy STX elsewhere in the Stacks DeFi ecosystem. As a result, hundreds of millions of dollars worth of STX are currently locked and illiquid.
Enter Liquid Stacking.
Liquid Stacking:
1. Enables users to earn native yield through Stacking.
2. Enables users to simultaneously allocate their assets to other Bitcoin DeFi protocols (and earn additional yield).
As a user, Liquid Stacking is a win-win. As a result, teams have jumped at the opportunity.
This post is dedicated to highlighting Stacking DAO. However, LISA, created by ALEX, and Papaya are other Liquid Stacking Protocols in the Stacks ecosystem that will be covered at a later time.
Now, it’s beginning to power the Bitcoin DeFi ecosystem.
Stackers earn native BTC yield when stacking STX. As a result, DeFi in the Stacks ecosystem has suffered from what Muneeb has called the “black hole effect.” If Stackers can earn BTC when stacking STX, there is little incentive to deploy STX elsewhere in the Stacks DeFi ecosystem. As a result, hundreds of millions of dollars worth of STX are currently locked and illiquid.
Enter Liquid Stacking.
Liquid Stacking:
1. Enables users to earn native yield through Stacking.
2. Enables users to simultaneously allocate their assets to other Bitcoin DeFi protocols (and earn additional yield).
As a user, Liquid Stacking is a win-win. As a result, teams have jumped at the opportunity.
This post is dedicated to highlighting Stacking DAO. However, LISA, created by ALEX, and Papaya are other Liquid Stacking Protocols in the Stacks ecosystem that will be covered at a later time.
Stacking DAO Surpasses $100M Total Value Locked
In December, Stacking DAO became the first Liquid Stacking protocol on Stacks.
It added over 100 million dollars to its total value locked (TVL) in a few short months. Ortege, a blockchain analytics company, shares the data.
It added over 100 million dollars to its total value locked (TVL) in a few short months. Ortege, a blockchain analytics company, shares the data.
Stacking DAO is gaining traction partly because it improves the Stacking experience.
Following the upcoming Nakamoto Launch, Stackers (signers) will be required to lock ~100,000 STX for 2 weeks and run a Signer node. The Signer serves a key role in the Stacks ecosystem by 1). validating Stacks block production and 2). signing sBTC deposit and withdrawal transactions.
Stacking DAO removes this friction for users by making Stacking simple.
1. Users Stack STX through Stacking DAO’s Liquid Stacking Protocol. They no longer need to wait the two-week proof-of-transfer cycle to unlock their STX.
2. In return, they receive liquid stSTX, which automatically compounds STX rewards.
3. Finally, users can deploy their stSTX through DeFi to earn additional rewards.
Ortege shows that users love this improved experience.
Following the upcoming Nakamoto Launch, Stackers (signers) will be required to lock ~100,000 STX for 2 weeks and run a Signer node. The Signer serves a key role in the Stacks ecosystem by 1). validating Stacks block production and 2). signing sBTC deposit and withdrawal transactions.
Stacking DAO removes this friction for users by making Stacking simple.
1. Users Stack STX through Stacking DAO’s Liquid Stacking Protocol. They no longer need to wait the two-week proof-of-transfer cycle to unlock their STX.
2. In return, they receive liquid stSTX, which automatically compounds STX rewards.
3. Finally, users can deploy their stSTX through DeFi to earn additional rewards.
Ortege shows that users love this improved experience.
Liquid Stacking Adds Ecosystem Liquidity
Liquid Stacking is not only great for users, it’s great for DeFi ecosystem activity. When Stackers gain liquidity, they can deploy their assets in other areas of the ecosystem.
Stacking DAO has turned stacking from an ecosystem black hole to an accelerant of DeFi activity. When including Liquid Stacking in Stacks’ TVL calculation, Stacks’ TVL increased from around $60M TVL at the end of 2023 to about $290M at the time of this writing (the end of March 2024).
Stacking DAO’s partnership with Bitflow illustrates how Liquid Stacking can benefit a DeFi ecosystem. On December 28, 2023, Bitflow, a decentralized exchange built on Bitcoin, announced its partnership with Stacking DAO.
The partnership makes it simple for users to stack their STX tokens on Stacking DAO and immediately boost their yield with Bitflow.
Stacking DAO has turned stacking from an ecosystem black hole to an accelerant of DeFi activity. When including Liquid Stacking in Stacks’ TVL calculation, Stacks’ TVL increased from around $60M TVL at the end of 2023 to about $290M at the time of this writing (the end of March 2024).
Stacking DAO’s partnership with Bitflow illustrates how Liquid Stacking can benefit a DeFi ecosystem. On December 28, 2023, Bitflow, a decentralized exchange built on Bitcoin, announced its partnership with Stacking DAO.
The partnership makes it simple for users to stack their STX tokens on Stacking DAO and immediately boost their yield with Bitflow.
For DEXs like Bitflow to operate, they require market participants to provide liquidity to trading pairs.
By partnering with Stacking DAO, Bitflow quickly gained access to liquidity to support their stSTX pools. At the time of this writing, Bitflow held about 12 million STX (around $40M) in the pool. Ortege shares the data to support this.
By partnering with Stacking DAO, Bitflow quickly gained access to liquidity to support their stSTX pools. At the time of this writing, Bitflow held about 12 million STX (around $40M) in the pool. Ortege shares the data to support this.
Liquid Stacking: Great for Users and Great for DeFi
Liquid Stacking is critical infrastructure for Bitcoin DeFi.
It provides needed liquidity to Stackers solving the “black hole effect” in the Stacks ecosystem. With this liquidity, users can bootstrap other ecosystem players like Bitflow.
Follow along as Stacking DAO continues to grow and ignite Bitcoin DeFi.
It provides needed liquidity to Stackers solving the “black hole effect” in the Stacks ecosystem. With this liquidity, users can bootstrap other ecosystem players like Bitflow.
Follow along as Stacking DAO continues to grow and ignite Bitcoin DeFi.