DeFi

Use cases of DeFi on Stacks

Stacks enables users to put their BTC to work in trust-minimized ways: borrowing against it, providing liquidity, earning yield, or participating in programmable financial products that settle on Bitcoin. This ecosystem gives builders the foundation to extend Bitcoin from a passive store of value into an active financial layer.

Here are some powerful demonstrations of unlocking DeFi for Bitcoin:

Hermetica

Hermetica is a DeFi protocol built on Stacks whose mission is to bring fully Bitcoin-native stablecoins and yield products to the Bitcoin ecosystem. Their flagship asset is USDh — a Bitcoin-backed, yield-bearing synthetic dollar.

Implementation highlight: The code snippet below highlights the migration lock, manager assignment, and token deprecation logic all in one tight block. It captures the “power unlock” of the contract without pulling in the entire file:

• Safely upgrade USDh by freezing old token operations once migration starts.

• Assigns a migration manager to burn and migrate balances securely.

• Ensures consistent supply and a trust-minimized transition to the new token.

SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.usdh-token-v1

;; Prevents all token activity once migration has begun
(define-read-only (is-not-migrated)
  (ok (asserts! (is-eq u0 (var-get migration-start-height)) ERR_DEPRECATED_TOKEN))
)

;; Begins the migration process and hands control to a migration manager contract
(define-public (start-migration (manager <token-migration-trait>))
  (begin
    (try! (is-not-migrated))
    (try! (contract-call? .hq-v1 check-is-owner contract-caller))
    (var-set migration-start-height burn-block-height)
    (var-set migration-manager (some (contract-of manager)))
    (contract-call? manager start-migration burn-block-height (ft-get-supply usdh))
  )
)

;; Allows the designated migration manager to burn a user’s balance and extract it for migration
(define-public (migrate-balance (who principal))
  (let ((balance (ft-get-balance usdh who)))
    (asserts! (is-eq (var-get migration-manager) (some contract-caller)) ERR_NOT_MIGRATION_MANAGER)
    (asserts! (> balance u0) (ok u0))
    (try! (ft-burn? usdh balance who))
    (ok balance)
  )
)

Check out more from Hermetica

• [Official] Official website of Hermetica

• [Stacks YT] Earn up to 25% with Your BTC as Collateral with Jakob Schillinger

• [Hiro YT] Lessons From Building Bitcoin DeFi

• [Hiro Blog] How Hermetica Uses Chainhook to Track Bitcoin Deposits

• [contract] SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.usdh-token-v1

---

StackingDAO

StackingDAO is the hub for liquid stacking on Stacks. One of their liquid stacking services stSTXbtc, is a liquid stacking token (LST) backed 1-to-1 with STX, and holders receive sBTC rewards daily that can be claimed at any moment.

Implementation highlight: This function initiates a withdrawal of stSTXbtc, locks the underlying STX for withdrawal, burns the derivative token, and mints an NFT that represents the user’s withdrawal claim. It effectively transforms a liquid derivative token into a time-locked withdrawal right.

• Enforces protocol-level safety checks

• Determines the unlock Bitcoin (burn) height

• Links the withdrawal to an NFT “claim ticket”

• Coordinates state changes across multiple protocol contracts

SP4SZE494VC2YC5JYG7AYFQ44F5Q4PYV7DVMDPBG.stacking-dao-core-btc-v2

;; --snip--

(define-public (init-withdraw 
  (reserve <reserve-trait>) 
  (direct-helpers <direct-helpers-trait>)
  (ststxbtc-amount uint)
)
  (let (
    (sender tx-sender)
    (unlock-burn-height (unwrap-panic (contract-call? .stacking-dao-core-v4 get-withdraw-unlock-burn-height)))

    (nft-id (unwrap-panic (contract-call? .ststxbtc-withdraw-nft get-last-token-id)))
  )
    (try! (contract-call? .dao check-is-enabled))
    (try! (contract-call? .dao check-is-protocol (contract-of reserve)))
    (try! (contract-call? .dao check-is-protocol (contract-of direct-helpers)))
    (asserts! (not (get-shutdown-init-withdraw)) (err ERR_SHUTDOWN))

    (try! (contract-call? .data-core-v2 set-ststxbtc-withdrawals-by-nft nft-id ststxbtc-amount unlock-burn-height))
    
    (try! (contract-call? direct-helpers subtract-direct-stacking tx-sender ststxbtc-amount))

    ;; Burn stSTXbtc tokens
    (try! (as-contract (contract-call? reserve lock-stx-for-withdrawal ststxbtc-amount)))
    (try! (contract-call? .ststxbtc-token-v2 burn-for-protocol ststxbtc-amount sender))
    (try! (as-contract (contract-call? .ststxbtc-withdraw-nft mint-for-protocol sender)))

    (print { action: "init-withdraw", data: { stacker: tx-sender, nft-id: nft-id, ststxbtc-amount: ststxbtc-amount, unlock-burn-height: unlock-burn-height, block-height: block-height } })
    (ok nft-id)
  )
)

Check out more from StackingDAO

• [Hiro YT] Going Under the Hood of stSTXbtc with Philip De Smedt from StackingDAO

• [Hiro YT] A Simple Breakdown of the StackingDAO Clarity Contracts on Stacks