Stacks token holders have approved SIP-045, a protocol change that introduces Bitcoin staking to the network and sets up a hard fork expected around July 29 near Bitcoin block 907,740. According to the reported result, more than 99% of votes backed the proposal, well above the 80% threshold required for hard-fork measures approved by stacked STX.

Vote clears PoX-5 rollout

The approved proposal is formally titled “PoX-5: Bitcoin Staking and Emission Schedule Alignment.” It was voted on alongside SIP-044, a companion upgrade that adds Clarity 6 and new staking post-conditions. Both measures passed after voting opened on July 6.

The PoX-5 change is designed to let users lock BTC in a timelocked contract on Bitcoin’s base layer while retaining control of their own keys. That locked bitcoin can then be paired with locked STX in order to earn a yield paid in BTC.

Mechanics of the new system

Under the design described for the upgrade, participants fund a timelocked UTXO on Bitcoin using OP_CHECKLOCKTIMEVERIFY and match it with an STX lock worth at least 5% of the BTC bond. The commitment period is about six months.

Stacks verifies the Bitcoin-side lock through an SPV proof, with the system described as avoiding both custodians and trusted bridges. The yield is sourced from the bitcoin miners already bid into the network through Proof of Transfer. Paired BTC-STX bonds are targeted to earn about 3% APY in BTC. STX-only stackers receive 85% of excess rewards, while the remaining 15% is directed to a reserve intended to cover shortfalls. The structure does not include slashing, and principal is meant to be returned in full when the timelock ends.

Launch limits and supply changes

The initial bootstrap phase is set to cap capacity at 3,000 BTC. That phase will be overseen by the Stacks Endowment with whitelisted partners, with about 10% of capacity open to pools. A public testnet went live this week, and a “Genesis Bond” is targeted for late August.

SIP-045 also undoes an emissions reduction introduced in April. The proposal restores the STX coinbase reward to 1,000 STX per Bitcoin block from 500, increasing supply issuance as part of the broader staking rollout.

Market reaction and background

The vote did not lift the token in the reported market snapshot. STX was trading at $0.144, down 13% over 24 hours, while Bitcoin was down 1.9% over the same period. The broader Stacks ecosystem has distributed more than 4,200 BTC in stacking rewards since Proof of Transfer launched in 2021, an amount the source said was worth roughly $500 million. Its sBTC bridged asset currently holds about $186 million, down from a first-quarter peak of $545 million as Bitcoin’s price declined.

When the Bitcoin Staking whitepaper was published in May, Ali said the design would allow holders to earn BTC-denominated yield “trustlessly” while keeping their bitcoin on layer 1.

Source: thedefiant.io