Stacks Activates PoX-5 Hardfork To Enable Bitcoin Staking Foundation

@Stacks has officially activated the PoX-5 hardfork, a terminal upgrade to its Proof of Transfer consensus mechanism that deepens the relationship between $BTC and $STX. The activation marks a significant milestone for the network, laying the technical groundwork for self-custodial Bitcoin staking.

What PoX-5 Changes

Stacks activated its PoX-5 hard fork at Bitcoin block 960,230, adding the consensus infrastructure for Bitcoin staking. The centrepiece of the upgrade is a new product called Bitcoin Bonds. 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.

To participate, Bitcoin holders lock their BTC on the Bitcoin Layer 1 network using a timelock mechanism and pair it with STX. No bridging required. No custodial transfers. The initial bootstrap phase carries a capacity cap of 3,000 BTC, with a projected yield of around 3% APY paid in BTC and a minimum STX pairing ratio of 5%.

On the revenue distribution side, PoX-5 introduces a waterfall distribution model, with protocol bond holders sitting at the top of the payment queue and an initial target yield of roughly 3% APY. STX-only stakers receive 85% of any surplus revenue, while the protocol reserve fund absorbs the remaining 15%.

What Stakers Must Do Now

All STX committed through the previous contract unlocks 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 after the hard fork. Solo stakers can restake once the upgrade becomes active, while pool participants must wait for their provider to update its infrastructure and reopen staking.

Holders who are not actively staking need not act. The hard fork does not create a new token and will not affect STX balances, wallet addresses, or private keys. Major exchanges are currently monitoring network stability before reopening deposits and withdrawals.

Following activation, Stacks plans to begin the Bitcoin staking rollout with the institutional Genesis Bond in late August before expanding capacity to additional participants. The PoX-5 codebase has been audited by Trail of Bits and Clarity Alliance, with additional review from Asymmetric Research.

Sources:
Crypto Briefing: Stacks activates PoX-5 upgrade to launch Bitcoin staking
PrimeXBT: Stacks activates PoX-5 hard fork, opening Bitcoin staking through Bitcoin Bonds
Stacks Official Blog: The Public PoX-5 Testnet Is Live