Stacks activates PoX-5 upgrade to launch Bitcoin staking

Stacks is set to activate its PoX-5 hard fork this week, introducing the consensus infrastructure needed to support Bitcoin staking on the network.

The upgrade is scheduled to activate at Bitcoin block 960,230, currently expected around 2 a.m. Eastern Time on Thursday, July 30. The precise timing may change depending on how quickly Bitcoin blocks are produced.

PoX-5 upgrades Proof-of-Transfer, the Stacks consensus mechanism under which miners commit BTC to compete for the right to produce Stacks blocks and receive STX rewards.

The upgrade introduces Bitcoin Bonds, which allow users to lock BTC on the Bitcoin network and pair it with STX on Stacks to earn BTC denominated yield while retaining control of their Bitcoin keys.

Stacks describes the structure as a protocol bond. Bitcoin remains locked on Bitcoin layer one, while the corresponding STX position is held through a Stacks smart contract. Yield is funded by the BTC that Stacks miners commit through Proof of Transfer.

Bitcoin Bonds will activate at the consensus level with the hard fork, although participation will open gradually.

Initial capacity will be reserved for approved participants during a bootstrap period. The first institutional Genesis Bond is expected in late August, followed by community participation through selected pools using sBTC.

Stacks previously launched public and private PoX-5 testnets to test bonding, registration, reward distribution, and unbonding before the mainnet upgrade.

The hard fork does not create a new token and will not affect STX balances, wallet addresses, or private keys. STX holders who are not currently staking do not need to take any action.

Existing STX stakers must restake after PoX-5 activates to continue earning rewards.

All STX currently committed through the previous contract will unlock during the upgrade as staking moves to the new PoX-5 contract. Users must restake before Bitcoin block 962,050 to receive rewards during the first cycle following the hard fork.

Solo stakers can restake after the upgrade becomes active. Pool participants must wait for their provider to update its infrastructure and reopen staking under the new contract.

PoX-5 also removes the previous cooldown cycle, allowing stakers to change their reward address without missing a full cycle. The upgrade also simplifies pool participation and reduces the risk that users miss rewards because of failed pool commitments.

STX only stakers will continue receiving BTC rewards under the new structure.

Bitcoin Bonds receive their target yield first. Of the remaining BTC committed by miners, 85% will be distributed to STX only stakers, while 15% will enter a reserve fund intended to support future payouts.

Stacks said STX only participants are expected to receive most of the miner rewards during the early cycles because Bitcoin Bond capacity will initially remain limited.

The protocol bond model is designed to generate yield without lending or transferring custody of the underlying Bitcoin. However, Stacks notes that target yields are not guaranteed and remain dependent on miner participation and network conditions.

Exchanges supporting STX may temporarily suspend deposits and withdrawals around the activation period while upgrading their infrastructure. Trading is expected to continue, although each platform will establish its own maintenance window.

Stacks said node operators must upgrade to stacks core version 4.0.1 before block 960,230 to remain connected after the new consensus rules take effect.

The PoX-5 codebase has been audited by Trail of Bits and Clarity Alliance, with additional review from Asymmetric Research.

Following activation, Stacks plans to begin the Bitcoin staking rollout with the institutional Genesis Bond in late August before expanding capacity to additional participants.

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