What is StackingDAO?

StackingDAO is a DeFi protocol built on the Stacks blockchain, which itself is a Bitcoin Layer 2 designed to extend Bitcoin with smart contracts and applications. It operates as an application layer protocol rather than its own blockchain, using Stacks’ Proof of Transfer consensus where BTC is distributed as rewards to participants who lock STX tokens. The core function is “stacking,” where users lock STX to support network security and receive yield derived from Bitcoin payments made by miners.

StackingDAO has a liquid stacking model by issuing tokenized representations of locked STX, such as stSTX and stSTXbtc, which users receive after depositing their tokens. These tokens represent the underlying stacked position and can be used across DeFi applications while the original STX remains locked in the protocol’s smart contracts.

Rewards generated from stacking are collected into a shared pool and distributed continuously, allowing users to receive yield without waiting for full stacking cycles. The utility for users is the ability to earn Bitcoin-based yield from STX while keeping liquidity and interacting with other DeFi services on the Stacks ecosystem.