HashKey Cloud will participate in Stacks' Genesis Bond pilot program, according to an announcement from Stacks founder Muneeb Ali on Aug. 27. The move makes HashKey the second institution publicly committed to the bond initiative, which aims to demonstrate institutional demand for yield generated natively on Bitcoin.
Under the Genesis Bond structure, participants time-lock Bitcoin on the base layer and retain custody of the keys. HashKey will pair its Bitcoin commitment with STX tokens worth approximately 5% of the locked amount. The Bitcoin remains outside lending agreements, wrappers, or third-party custody arrangements throughout the bond period.
How Returns Are Generated
Stacks targets approximately 3% annualized yield from Bitcoin committed by network miners. The actual payout varies based on Stacks miner economics and the protocol's fee activity. Across a roughly six-month bond spanning 24 reward cycles, participants could receive approximately 1.44% of locked Bitcoin if the target is realized.
Stacks miners commit Bitcoin as they compete to produce blocks and receive STX block rewards. Genesis Bond holders receive their target return first from the pool of miner-committed Bitcoin. If miner revenue falls short of requirements, Stacks' protocol design prioritizes STX-only stakers first before compressing returns for bond holders.
Custody and Risk Structure
The bond separates principal custody from return generation. Bitcoin keys remain with participants, while yield exposure carries Stacks protocol risk and requires maintaining an STX position vulnerable to price movements. An early exit option returns the BTC principal and ends remaining yield, though paired STX remains locked for the full term.
HashKey's allocation amount was not disclosed. The total Bitcoin committed across all participants is expected to become visible on-chain when the bond begins around Sept. 10.
Program Structure and Auditing
The Genesis Bond operates within a managed bootstrap rather than an open auction during PoX-5, which activated on July 30. The Stacks Endowment sets each bonding period's capacity, target yield, and allocation. A future PoX-6 proposal is intended to replace these managed settings with an algorithmic, permissionless auction.
The codebase received audits from Trail of Bits and Clarity Alliance, with additional review by Asymmetric Research. A medium-severity issue identified in the stacks-core repository describes a flaw in the bond rollover path where participants moving into later bonds could remain credited with old reward shares after withdrawing collateral, potentially reducing other participants' final-cycle rewards.
