Stacking DAO Stacked StacksPrice

(STSTX)

stSTX is a liquid staking token representing STX (Stacks) tokens deposited into Stacking DAO for "Stacking." It enables users to earn up to 10% APY in auto-compounding STX rewards, while maintaining asset liquidity for use across various Stacks decentralized applications (dApps). Stacking is the core incentive mechanism of the Stacks blockchain, linking it to Bitcoin and offering native BTC rewards on Bitcoin L1. Stacking DAO simplifies this process through its liquid staking solution.

When users deposit STX tokens into Stacking DAO, they receive stSTX in return. The deposited STX is then utilized by Stacking DAO for Stacking. The generated BTC rewards are converted back into STX and automatically reinvested into the smart contracts backing stSTX. This mechanism ensures that while your stSTX token balance remains constant, the underlying value of each stSTX token gradually increases over time as more STX rewards accumulate, allowing for auto-compounding STX yield.

Stacking DAO offers two liquid staking tokens: stSTX and stSTXbtc. stSTX auto-compounds rewards in STX, leading to an increase in its value relative to STX over time. In contrast, stSTXbtc is backed 1-to-1 with STX, but its holders receive sBTC rewards daily, which can be claimed directly. Both tokens solve challenges of traditional Stacking, such as minimum STX requirements and the need for node operation, providing instant yield upon deposit.

stSTX is deeply integrated within the Stacks DeFi ecosystem. It's usable across various decentralized applications (dApps) for activities such as lending, borrowing, providing liquidity, or swapping for other tokens on decentralized exchanges. For example, users can swap stSTX for STX on Bitflow or borrow aeUSDC against their stSTX on Zest Protocol. Reports indicate that over 50% of stSTX is deployed within Stacks DeFi protocols.

Users can instantly swap their stSTX back to STX via platforms like Bitflow for immediate liquidity. Alternatively, a traditional withdrawal can be initiated through Stacking DAO, which typically takes up to 14 days, corresponding to the length of one Stacking cycle. Stacking DAO may also facilitate instant unstacking if sufficient idle liquidity is available within the protocol.

Despite Stacking DAO's security measures, potential risks exist. These include smart contract risk, referring to vulnerabilities in the underlying code, though it has undergone multiple audits. Proof-of-Transfer (PoX) risk relates to potential issues within the Stacks blockchain's consensus mechanism, which could impact funds. Centralization risk stems from STX being delegated to institutional-grade signers, although efforts are made to diversify these delegations. Finally, liquidity risk could affect market depth and trading efficiency if data isn't readily available. Stacking DAO ensures user funds are securely held in smart contracts, inaccessible to the team.