HashKey Cloud announced on Sept. 7 that it has joined Stacks as a launch partner for self-custodial Bitcoin staking.
The partnership gives HashKey Cloud two roles. It will take part in Stacks’ first Genesis Bond and also join the group of signers responsible for securing sBTC transfers.
HashKey Cloud operates under HashKey Holding Limited. Stacks founder Muneeb Ali announced the partnership during a HashKey Cloud and Cactus Custody event in Hong Kong.
HashKey Cloud says its infrastructure supports more than 40 blockchain networks worldwide. Stacks also said the company manages around HK$29 billion in staked assets. These figures were provided by the companies and were not independently verified for the announcement.
HashKey Cloud will be part of the first institutional group taking part in Stacks’ new Protocol Bond system. Stacks developers expect the Genesis Bond to launch around Sept. 10, although the exact launch time has not been confirmed.
Stacks has not yet announced the final capacity or how much each participant will be able to commit. Technical or operational issues could also change the schedule.
The first group includes other institutional participants such as digital asset manager 21Shares and UTXO Management, a subsidiary of Bitcoin treasury company Nakamoto Inc.
The Genesis Bond is designed to let institutions earn Bitcoin-based rewards without handing their Bitcoin over to a centralized custodian.
The Bitcoin used in the bond stays on the Bitcoin network. Participants can therefore verify the related timelock transactions onchain instead of relying only on statements from Stacks or participating companies.
However, the term “Bitcoin staking” needs some explanation.
Bitcoin itself uses proof-of-work and does not have a native staking system. Stacks does not change Bitcoin’s consensus rules.
Instead, Stacks uses a system called Proof of Transfer, or PoX. Stacks miners commit Bitcoin while competing to produce blocks, and qualifying participants can receive part of that Bitcoin as rewards.
Under Stacks’ PoX-5 system, the Protocol Bond connects two separate commitments. A participant locks Bitcoin on the Bitcoin network and also locks a matching amount of STX on Stacks.
The bond lasts for 12 Stacks reward cycles, which is roughly six months. The Bitcoin stays in a wallet controlled by the participant’s own keys rather than being transferred to a centralized custodian or converted into a wrapped asset.
Participants also lock STX through a signer-manager contract. The Bitcoin and STX positions are linked and remain active during the bond period.
There are limits on how participants can use the system. Each Stacks principal can have only one active staking position. A participant cannot use the same principal for both an STX-only position and a Protocol Bond. Two Protocol Bonds cannot be held by the same principal at the same time.
Participants can leave early, but doing so means giving up the remaining rewards for that cycle. The Bitcoin itself can still be recovered, but the holder must provide the required signature.
Rewards initially come in the form of sBTC. Participants can request native Bitcoin by providing a Bitcoin payout address if their selected signer manager supports Bitcoin withdrawals.
Native Bitcoin withdrawals are not available in every setup. If a withdrawal cannot be completed within the participant’s maximum transaction-fee limit, the payment can instead be made in sBTC.
Stacks is targeting an annualized Bitcoin yield of around 3% during the early phase. That figure is a target, not a guaranteed return. Actual rewards can change depending on miner activity, available capacity and network conditions.
HashKey Cloud will also become a signer for sBTC, the Bitcoin-backed asset used within the Stacks ecosystem.
Stacks previously confirmed that HashKey Cloud, Ankr and The Tie had joined its signer group.
sBTC is designed to represent Bitcoin on Stacks at a one-to-one ratio. This allows users to use Bitcoin within Stacks applications while the underlying Bitcoin remains managed through the signer network.
The signers work together to approve Bitcoin deposits and withdrawals. No single signer can independently move the Bitcoin backing sBTC.
Stacks said the system has maintained a 70% approval threshold during the latest signer rotation. Withdrawals and other important operations require approval representing at least 70% of the participating signer weight.
Adding HashKey Cloud brings another major infrastructure provider into the signer group. Stacks says this can improve institutional access and spread responsibility across more companies and regions.
However, having more signers does not remove all risks. Users still depend on enough signers being available and following the system correctly.
Software problems, signer outages or coordination issues could delay deposits and withdrawals. Problems with smart contracts could also affect applications using sBTC.
Self-custody removes the need to rely on one centralized custodian, but it does not eliminate risks linked to Stacks contracts, wallets, signer managers or the wider sBTC system.
Stacks plans to introduce Protocol Bonds in stages. The first Genesis Bond is mainly aimed at institutions and professional market participants rather than being immediately available to everyone.
During the initial phase, Stacks plans to allocate bond capacity to approved partners. Some capacity may later become available through selected pooling providers.
Wallet support is another requirement. Leather and Xverse support PoX-5 features, while Ledger users need Stacks application version 0.26.15 or later to complete transactions using the new spending conditions.
There are also restrictions near the end of each reward cycle. During the final 100 Bitcoin blocks, the protocol does not accept new staking transactions, position changes or withdrawal requests.
HashKey Cloud has not disclosed how much Bitcoin or STX it plans to commit to the Genesis Bond. It has also not announced participation fees, customer requirements or all of the jurisdictions where its services will be available.
The company warned that Bitcoin staking services may not be available in some regions because of local laws. It also did not promise any specific investment return.
The next major step is the Genesis Bond launch. Details such as the exact activation time, the amount of Bitcoin committed, participating institutions and available capacity will give the market a clearer picture of how much demand there is for Stacks’ new Bitcoin staking system.
