Stacking DAO

Stacks recently released its Q3 report with updates. Here's a short TL;DR + some of my thoughts ↓ → Bitcoin Staking The first two staking rounds brought in 735 BTC, with 21Shares, HashKey Cloud, and UTXO Management among the participants. → Liquid Staking @StackingDao accounted for 483 BTC of the 505 BTC in the second round. It now has 636 BTC worth of stBTC in circulation. → STX Staking The amount of STX staked has grown by over 25% since the PoX-5 upgrade, from 392M to 493M STX. → Lending @ZestProtocol now has over $122M in deposits and $42M in loans, with around 800 BTC used as collateral. → Trading Trading across Stacks DEXs reached $16.7M in a single week in September, the highest in a year, with @Bitflow leading the activity. My guess is that BTC staking will end up benefiting more than just the staking protocols. More people borrowing against their staked BTC → more activity in lending markets and DEXs → more fees going to different parts of the ecosystem. Quite the opportunity for the entire ecosystem. Disclosure: I'm a long-time $STX holder and Stacks supporter.

I’ve been testing an sBTC loop on Zest Protocol on @Stacks. They're currently running an incentive campaign for 0.5 BTC every month. Here's a quick farming guide↓ 1. $sBTC + $USDCx This is the loop I tested first, since USDCx borrowing is also part of the incentive campaign. → Supply sBTC on @ZestProtocol → Borrow 40-50% USDCx against it → Swap the USDCx into more sBTC → Supply that sBTC back into Zest → Repeat several times I’m personally aiming for roughly 50-55% LTV. With USDCx debt, partial liquidation starts at 70%, so that leaves me roughly a 15-20% BTC drop before reaching the liquidation threshold. Just keep monitoring the price, and it'll be okay. 2. Other loops USDCx isn’t the only asset you can borrow against sBTC. The debt you choose basically changes what you’re trying to achieve with the loop: → sBTC Borrow sBTC and resupply it. Since the collateral and debt move together, there’s much less price mismatch, which is why Zest allows up to 80% LTV. → USDh Works similarly to my USDCx strategy. Borrow the stablecoin, swap it into more sBTC, then resupply. The difference right now is that USDCx borrowing qualifies for the new incentives. → STX / stSTX Borrow either asset, swap it into sBTC, and resupply. This becomes more of a relative-value trade because you benefit if sBTC performs better than the asset you borrowed. The last one carries much more cross-asset risk, which is reflected in the much lower 30% max LTV. So all three are pretty similar. The main difference is the level of cross-asset risk. Again, I'd go for borrowing USDCx because of the incentive campaign. 3. TL;DR For this, I'd say choose a strategy based on your short-term outlook for Bitcoin: → Bullish on BTC - USDCx/USDh debt gives the most direct leveraged BTC exposure. → Neutral on BTC - sBTC debt makes the most sense if the supply/borrow spread and incentives justify it, since I’m not really taking a BTC directional bet. → Bearish on BTC - sBTC debt is the more defensive loop because the collateral and debt fall together. Realistically tho, reducing leverage is safer than trying to optimize a loop for a BTC drawdown. Overall, there’s no single best loop here. Personally, my focus is on the incentives. Disclosure: I’m a long-time $STX holder and Stacks supporter.