Bitcoin Staking Bond 2: Liquid Staking Brings Bitcoin DeFi Into the Bond

Bond 2 is the second bonding period for Bitcoin Staking and the first where most capacity runs through liquid staking. StackingDAO holds the majority, and Xverse and 21Shares also take part. The cutoff for deploying BTC is Bitcoin block [970,450], and the bond starts October ~10.

Bitcoin Staking was designed with two paths from the start. Self-custodial staking is whitelisted for anchor participants, and BTC holders who are not on the whitelist participate through pooled staking using sBTC. The Genesis Bond (Bond 1) ran both: UTXO Management, 21Shares and HashKey bonded self-custodially, and Sypher Capital came in through liquid staking with StackingDAO. Bond 2 is built around liquid Bitcoin staking at scale, and what it shows about how BTC capital behaves when it stays liquid.

How Bond 2 Works

Most of Bond 2's capacity runs through StackingDAO, one of the confirmed pools. A StackingDAO position works like this:

• Bitcoin: Moves onto Stacks as sBTC, a 1:1 Bitcoin-backed asset managed by a decentralized signer set.
• stBTC: A liquid claim on the staked position, usable across Stacks. A holder can pledge stBTC on Zest, for example, to borrow USDC while the underlying BTC keeps earning staking rewards.
• Rewards: BTC staking rewards are distributed to participants by the pool, net of the pool's own fees and mechanics.
• Custody: Self-custodial positions stay timelocked on Bitcoin L1 under the participant's custody and are whitelisted for anchor participants, with a 50+ BTC minimum. Pooled staking runs through sBTC, secured by a decentralized signer set, so it is not fully self-custodial.

StackingDAO has run liuid staking on Stacks for 5 years with over $73.9M in TVL.

Where the Yield Comes From

Stacks miners spend BTC to mine blocks and earn STX through Proof of Transfer (PoX), a mechanism that has run in production for over five years. That BTC flows to Bitcoin Staking participants, and in the pooled path the pool distributes it. During the bootstrap phase, the Stacks Endowment sets the target rates.

The Liquid Staking Opportunity

In traditional markets, a repo (repurchase agreement) lets the owner of a bond borrow cash against it without selling it. The owner hands over $100 of Treasuries, receives about $98 in cash, and agrees to buy the bonds back later, often the next day, for slightly more. The bond's interest still goes to the owner, so the same asset earns yield and funds a second use of capital. The U.S. repo market averaged about $12.6 trillion in daily exposures in Q3 2025.

Liquid staking follows the same logic. A staker receives stBTC, keeps earning staking rewards on the underlying BTC, and can use stBTC elsewhere on Stacks. Bitcoin could not do this before staking, because it earned nothing while held. Self-custodial lending, which explores borrowing against staked BTC while the owner keeps custody of the collateral, is in active research by core engineers. In a traditional repo, lenders can reuse pledged collateral.

What Bond 2 Shows

Bond 2 is the first bond where most capacity sits in liquid form. During the bootstrap phase, that gives the ecosystem early data on how liquid staked BTC moves, where it is deployed, and how demand behaves when a position stays usable. The data informs how capacity is sized as Bitcoin Staking moves toward PoX-6, the next version of Proof of Transfer, and the Genesis Bond institutions are reviewing the same numbers. Institutional capacity continues to scale over later bonding periods, starting with Bond 3.

What Comes Next

Bitcoin Staking is the first phase. Self-custodial lending and borrowing, stBTC bootstrapping the apps, privacy, AI capital management, sBTC payments and R&D follow.

How to Participate

The open path runs through the pools' own pages, Xverse and StackingDAO, and each pool sets its own capacity, readiness and requirements. Self-custodial staking is whitelisted for anchor participants, and applications go through the institutional page. The options page shows which path fits, and Pooled Bitcoin Staking on Stacks: How It Works covers the open path in full.

FAQ

What is Bitcoin Staking Bond 2?

Bond 2 is the second bonding period for Bitcoin Staking and the first where most capacity runs through liquid staking, led by StackingDAO. The cutoff for deploying BTC is Bitcoin block [970,450], and the bond starts October ~10.

How is Bond 2 different from the Genesis Bond?

The Genesis Bond had four institutions. UTXO Management, 21Shares and HashKey bonded self-custodially, and Sypher Capital came in through StackingDAO. Bond 2 is built around liquid Bitcoin staking at scale. StackingDAO holds the majority allocation, and Xverse and 21Shares also take part.

Why does StackingDAO hold most of Bond 2?

Capacity is allocated to the participants that grow the Bitcoin economy on Stacks, measured by the lasting capital and new users they bring into the ecosystem. Bond 2 applies that measure to a Bitcoin DeFi protocol.

Do I give up custody of my BTC?

It depends on the path. Self-custodial positions keep BTC timelocked on Bitcoin L1 under the participant's custody and are whitelisted for anchor participants. Pooled staking moves Bitcoin onto Stacks as sBTC, secured by a decentralized signer set, so it is not fully self-custodial, and the pool distributes rewards to participants.

Where does the yield come from?

Stacks miners spend BTC to mine blocks and earn STX through Proof of Transfer (PoX). That BTC flows to Bitcoin Staking participants, and in the pooled path the pool distributes it. Rates are targets and never guaranteed.

What is stBTC, and what can I do with it?

stBTC is a liquid claim on a staked position. It can be used across Stacks, for example as collateral on Zest to borrow USDC while the underlying BTC keeps earning staking rewards.

How do I take part in Bond 2?

The open path runs through the pools' own pages, Xverse and StackingDAO, and each pool sets its own capacity, readiness and requirements. Self-custodial staking is whitelisted for anchor participants with a 50+ BTC minimum, and approval is not guaranteed.

What comes after Bond 2?

Institutional capacity continues to scale over later bonding periods, starting with Bond 3. Beyond staking, self-custodial lending and borrowing, privacy, AI capital management, sBTC payments and R&D each sit at their own stage.