Eligible BitGo Bank & Trust clients can now stake Bitcoin through Stacks and earn BTC rewards while their coins stay timelocked in BitGo's qualified custody.
Key Facts
BitGo Bank & Trust has made Bitcoin Staking with Stacks available to eligible institutional clients, who can stake BTC from their BitGo accounts and earn rewards paid in BTC.
The staked Bitcoin stays timelocked on the Bitcoin network in BitGo Bank & Trust's qualified custody for the length of each bond, which runs about six months.
Each position must be paired with STX worth 5% of the staked BTC's value, and access is limited for now to whitelisted institutional partners managed by Stacks Labs.
BitGo's trust bank has opened Bitcoin staking through Stacks (STX) to eligible institutional clients, letting them earn rewards in BTC on coins that stay in its custody.
The staked Bitcoin (BTC) remains on the Bitcoin network, timelocked for the length of each bond, and is not lent, bridged or wrapped, according to BitGo and Stacks Labs.
"Eligible qualified custody clients can now earn BTC rewards on bitcoin that stays in BitGo Bank & Trust custody through Bitcoin Staking with @Stacks," BitGo said on X on Tuesday.
How Bitcoin Staking With Stacks Works
Each position pairs BTC with STX worth 5% of the staked Bitcoin's value and is bonded for about six months, Stacks Labs said in a blog post. Principal is returned at maturity, and the protocol does not include slashing.
Rewards come from Stacks miners, who spend BTC on the Bitcoin network to mine Stacks blocks. Each bonding period has a target rate set before it opens, though the realized rate can vary with the timing of miner reward distributions, Stacks Labs said.
BitGo said the STX position carries its own market price exposure, and that participation involves other risks, including smart contract and protocol risk and restricted access to BTC during the bond, which could result in delay or loss. Rewards are variable and not guaranteed, it said.
Custody, Rewards and Access
The Bitcoin is held under a timelock using standard Bitcoin script, which BitGo said works for coins held with a qualified custodian. BitGo claims rewards on clients' behalf.
Clients can direct staking rewards to a different address from the one used to stake, which BitGo said can help issuers of exchange-traded products and funds keep principal and rewards separate.
Access is currently limited to whitelisted institutional partners managed by Stacks Labs. BitGo first integrated Stacks in 2021 and added institutional custody and minting of sBTC in August, Stacks Labs said.
The launch adds to BitGo's institutional services. In late August it completed its acquisition of NYDIG's institutional trading business, and last month Kalshi tapped BitGo for crypto-backed margin loans.
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