HashKey Cloud backs Stacks Genesis Bond targeting 3% Bitcoin yield

HashKey Cloud will commit Bitcoin to Stacks' Genesis Bond, time-locking BTC on the base layer while retaining keys to target roughly 3 percent annualized yield.

"HashKey Cloud brings the largest institutional staking operation in Asia into Bitcoin Staking, and that is exactly the kind of participant the Genesis Bond is built for," Muneeb Ali, founder of Stacks, said.

The bond requires STX worth roughly 5 percent of the committed Bitcoin, which determines the participant's capacity and locks the STX for about six months. Across 24 reward cycles, a participant would receive about 1.44 percent of locked BTC if the target is realized, with payouts varying based on Stacks miner economics. HashKey's allocation was not disclosed; total BTC committed becomes visible on-chain when the bond begins around Sept. 10 at Bitcoin block 966,350.

The Genesis Bond is the first test of whether institutions will accept variable, miner-funded returns in exchange for keeping Bitcoin self-custodied. Stacks targets roughly 3 percent annualized from BTC committed by its miners, but payouts depend on STX block rewards, fees and network activity. A future PoX-6 proposal is intended to replace the Endowment's managed parameters with an algorithmic, permissionless auction.

How the Bond Works

Under the native-BTC protocol bond, a participant places Bitcoin in a time-locked output on Bitcoin's base layer and retains the keys. The asset stays outside a lending agreement, wrapper or third-party custody arrangement. An early exit returns the BTC principal and ends the remaining yield, while the paired STX stays locked for the full term.

Stacks miners commit BTC as they compete to produce blocks and receive STX block rewards. Protocol-bond holders receive their target return first from that BTC pool. Excess miner revenue can build a reserve; under a sustained shortfall that depletes the reserve, returns would compress first for STX-only stakers and later for protocol-bond holders.

PoX-5 activated at Bitcoin block 960,230 on July 30. Stacks said the codebase was audited by Trail of Bits and Clarity Alliance, with additional review by Asymmetric Research. An open medium-severity issue in the official stacks-core repository identifies a flaw in the bond rollover path: near the end of a bond, a participant moving into a later bond can remain credited with old reward shares after withdrawing the collateral behind them, potentially reducing other participants' final-cycle rewards. The 4.0.1 PoX-5 contract source still contains the affected behavior, making a public fix or mitigation important before that rollover window arrives.

STX traded at $0.2531 as of 4:45 p.m. ET on Aug. 27, down 5.2 percent over 24 hours after an 80.6 percent weekly gain, CoinGecko data shows. Restaking participation stood at 88 percent of STX after the PoX-5 upgrade went live. The first bond operates inside a managed bootstrap rather than an open auction, with the Stacks Endowment setting each bonding period's capacity, target yield, BTC-to-STX ratio and allocation.

This article is for informational purposes only and does not constitute investment advice.