Proof of Growth: What SIP-031 Is and How It Will Accelerate Stacks Growth

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Whether you’re a seasoned stacker or just starting your journey, this newsletter is packed with everything you need to stay ahead in the world of crypto. Get ready to unlock new opportunities and elevate your DeFi game!

Stacking DAO is the leading liquid staking protocol on Stacks, allowing users to earn consensus rewards from stacking STX tokens while retaining liquidity by minting stSTX or stSTXbtc.

Over 80M STX — a new protocol TVL all-time high — is now deposited across stSTX, stSTXbtc, and native stacking products.

Liquid staking  enables users to participate in Stacks DeFi activities like trading, lending or providing liquidity, maximizing yield opportunities while still securing the network.

Over the last two cycles, the yield for holding stSTX or stSTXbtc has averaged ~8.86% APY, paid in additional STX or sBTC tokens. Stack Today Here.

What SIP-031 Is and How It Will Accelerate Stacks Growth

SIP-031 proposes the creation of a new endowment, funded by additional emissions, with the goal of accelerating Stacks ecosystem growth and strengthening its position as the leading Bitcoin Layer 2.

The proposal has already received strong support from many leaders across the Stacks ecosystem, including VCs and investors like Tim Draper, as well as prominent crypto voices such as Route2Fi.

Following active community engagement and feedback, the SIP has gone through refinements and is now approaching a final version.

If approved, SIP-031 could address some of the key blockers that have slowed ecosystem growth, unlocking real capital to fuel DeFi, sBTC expansion, and broader adoption.

The current version of the proposal suggests an average of 5.75% STX emissions over 5 years — keeping Stacks’ inflation rate well below the median across the top 50 crypto ecosystems.

Other chains such as Avalanche and Sui have demonstrated how targeted resource injections can rapidly scale adoption and developer activity. This endowment aims to do the same for Stacks, powering the next phase of the Stacks roadmap and pushing the protocol to become even more Bitcoin-aligned.

The proposed treasury allocation:

• 58% – Network bootstrapping & Working capital -— to kick off the DeFi flywheel effect
• 20% – Growth & marketing
• 12% – Engineering & security
• 10% – Ops and support functions

While Stacks is already the leading Bitcoin L2 by BTC supply, these funds can help accelerate momentum toward key milestones such as:

• Reaching the 21K sBTC supply target
• Advancing dual staking (stake BTC, earn BTC)
• Enabling sBTC gas fees for a more Bitcoin-native UX
• Expanding liquidity for upcoming BTC-first DeFi strategies

Additionally, DeFi users and builders will benefit from user-first incentives like LP rewards, yield boosts, stablecoin integrations, bridges, wallet support, security audits, go-to-market support, and more.

In summary, SIP-031 represents a major growth proposal for the Stacks ecosystem — one that can provide the necessary resources to scale adoption and cement Stacks as a core pillar of the Bitcoin economy.

You can read the updated SIP here: SIP-031 Draft.

The Stacks DeFi Show #69

On the latest episode of the Stacks DeFi Show, builders across the ecosystem discuss the latest trends in Stacks DeFi.

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