HashKey Cloud Joins Stacks’ Genesis Bond Pilot

HashKey Cloud will lock Bitcoin into Stacks’ Genesis Bond pilot while retaining the private keys, the Stacks founder Muneeb Ali announced on X on Aug. 27. The firm is the second institution publicly named for the program. The first on-chain bond commitments are expected to appear when the pilot begins around Sept. 10.

Under the Genesis Bond design, a participant sends self-custodied BTC to a time-locked output on Bitcoin’s base layer and pairs that position with STX tokens equal to about 5% of the committed BTC. The Bitcoin remains on the Bitcoin chain and under the participant’s keys; it is not lent, wrapped, or transferred to a third-party custodian. HashKey’s specific BTC allocation was not disclosed.

The bond’s returns come from Stacks miner revenue rather than native Bitcoin yields. Stacks targets roughly 3% annualized from the BTC that miners commit to the protocol. Over a roughly six-month Genesis Bond covering 24 reward cycles, that target translates to about 1.44% of locked BTC if miner revenue meets expectations. Actual payouts will vary with STX block rewards, transaction fees and overall network activity. Excess miner revenue can add to a reserve intended to smooth distributions.

Participants can take an early-exit path that returns the BTC principal but ends remaining yield; the paired STX remains locked for the full term. That creates different liquidity profiles for the two asset legs: the BTC can be recovered under the early-exit rule, while the STX portion stays illiquid and is exposed to STX price moves for the bond period.

The initial Genesis Bond runs inside PoX-5, where the Stacks Endowment sets each bonding period’s capacity, the BTC-to-STX ratio, target yield and allocation. A future PoX-6 proposal aims to replace those managed settings with an algorithmic auction model. PoX-5 activated at Bitcoin block 960,230 on July 30, and block 966,350 has been identified as a milestone that will start putting on-chain numbers to the protocol’s assumptions.

Stacks reported that the PoX-5 codebase was audited by Trail of Bits and Clarity Alliance and reviewed by Asymmetric Research. The public stacks-core repository contains an open medium-severity issue in the bond rollover path: if a participant moves into a later bond near the end of a period, they can remain credited with old reward shares after withdrawing the collateral behind them, which could reduce other participants’ share of a final-cycle reward. Stacks has noted the issue does not affect ordinary Genesis Bond enrollment but recommended a public fix or mitigation before the rollover window.

The Genesis Bond structure removes reliance on an outside custodian or borrower while adding exposure to STX price swings, miner-funded payout variability, managed program settings and new contract code. Market observers will watch on-chain commitments, weekly distributions and any disclosed allocation from HashKey to measure institutional interest in a Bitcoin-denominated yield inside the Stacks framework.