[DRAFT] Fueling Stacks Builders & Growth, Meet SIP-031

[howardmarin]

A fundamental distinction between Stacks and other alternative chain projects lies in their alignment with Bitcoin. Bitcoin is designed to be an incredibly resilient network, capable of withstanding a wide range of attacks. Every modification made to Stacks has been directed towards aligning it more closely with the unparalleled safety and security standards of Bitcoin. This alignment is what positions Stacks as a genuine Layer 2 solution for Bitcoin, meaning it aims to inherit the same level of trust and security that Bitcoin is known for. This trust will attract high-caliber users, including institutions managing significant funds on behalf of millions of clients.

To illustrate with a hypothetical scenario: if a government were to shut down the Stacks Foundation and target the officers of the Endowment, would Stacks still continue to function? This question underscores the importance of Stacks’ independence and robustness, qualities that are crucial for gaining the trust of major institutions and users with substantial investments.

If the Stacks network is fully Bitcoin aligned, funding will happen from VCs and institutions building out their own utility. Please make sure that what we vote on in SIP-031 increases Bitcoin alignment and does not introduce a potential government attack vector into Stacks.

[xenitron]

In a world reshaped by AI every minute, knowledge itself is rapidly evolving. Yet the most promising startups still come down to human creativity — something AI can’t fully replicate. The problem is that the tools we use to evaluate that creativity are outdated, especially in Web3.

Even worse, many ecosystems face bad actors — grant farmers, hackathon hunters, or polished proposals with little intention to build lasting value.

To save resources and build a more reliable system for evaluating early-stage startups, I’ve shared a proposal: Sybil-Resistant KPIs for Non-DeFi Projects

This framework doesn’t require funding. It can be adopted by a group of committed community members — especially if SIP-031 allocates a portion of funds to DeGrants or other builder-focused programs.

I believe this system can also benefit initiatives like Stacks Ascent or any future community-led funding rounds. It’s based on real experience — my team has won 3 hackathons and is actively developing a working product. That gave me the insight to build something for the next wave of builders.

[larry]

Hi all! Thanks to everyone who has put so much effort into this proposal. Even if we might disagree on certain things, it is clear to me that you all are acting in what you believe are the best interests of the project.

Given that I’ve been involved in Stacks since the beginning, I wanted to hold off sharing my views so as not to unduly influence others.

On a high level it is great that such an ambitious proposal is being made and so many people engaging with it - it means people 1) care about and 2) see a future in stacks.

I generally agree and have personally experienced the problems that various parties have pointed out with coordination and duplication of effort.

1. A large component of this proposal seems to be a reaction to the changed political situation in the USA with the Trump administration and crypto policy. What happens if or when he or the republicans lose power in 1.5 or 3.5 years?

2. What in SIP-031 minimizes political risk to the endowment? We don’t want to get into a situation where the political winds in the USA (or somewhere else) change (again) and because a quorum of the members are all American or live in New York, the committee has to do something it otherwise wouldn’t do. One idea would be limits on on committee members on a per citizenship/residence basis.

3. I’m stating the obvious here – and I assume most (if not all) of the authors of SIP-031 would agree – but I don’t like messing with the token supply. Inflation is of course the obvious cost, but there’s an unseen cost of reduced trust in or increase perceived risk in the system. Assuming SIP-031 is successful, though, I think the ecosystem will be able to earn that reduced trust back over time.

4. There’s been a lot of talk about the USD price of STX. I was surprised to find that the Nomiks Analysis focuses exclusively on the USD price and doesn’t even mention the word bitcoin or btc in the entire report once. USD has “officially” lost ~30% of its purchasing power in the past half decade. It’s lost even more value compared to gold and bitcoin. The price of anything looks good in USD…you could have a business that’s lost 20% of it’s real revenue in the past 5 years and it would show up as growth when priced in USD. We should be focused on the price of STX in bitcoin.

How do the tokeneconomics of this proposal look when the price is measured in bitcoin? Has this been modeled at various bitcoin per stx values?

@jude

The orange slice on the right represents how much of the total STX you would own after this SIP is ratified and successfully executed. Even though you would own less of the total STX, your slice’s total area (how much value you hold) is appreciably bigger.

5. Agree with @jude - the ultimate question is will SIP-031 make the pie bigger?

@jude

Traditional startups execute Series B rounds once they find product-market fit, and they do so by issuing new stock. If Stacks was a traditional company, and had the kind of product-market fit we see now, it would be trying to raise a Series B round post-haste to finance user acquisition.

6. Also agree with @jude that a Series B is a good analogy.

@yukan

In the spirit of operating more like a startup with a sense urgency. It would be beneficial to have a shorter mandate for the endowment. For example, the emissions could initially be set to stop at the 2 year mark. And the ecosystem must vote to renew the mandate past that. And there should be KPIs which the endowment is measured against.

7. This suggestion by @yukan is worth consideration: an automatic sunset clause that requires positive action by the community to continue emissions.

@marvin.id

The SIP has been authored by people a grew to respect and I doubt I would have given it much serious attention had it been written by anyone else.

@Tycho

Governance isn’t a community Twitter poll. When you hold STX you’re making the same bet you make with startup equity - you’re backing the team. Muneeb and core contributors already have most of their net-worth, reputations, and careers tied to this token and ecosystem. That’s 100% skin in the game.

So let leadership execute. Micromanaging every grant or budget line just burns time, kills speed, and drags the whole ecosystem down. A nine-member Treasury Committee with guardrails is not ‘centralisation’, it’s operational reality.

7. I specifically signed up to the Stacks ecosystem over a decade ago because of @muneeb and stayed because of the people he’s attracted to it, their character and ability to execute. I’m been impressed by Stacks “leadership” (to use @Tycho 's word) and the job they’ve done executing in an incredibly competitive market and a hostile regulatory environment. They’ve earned my support for SIP-031 and I plan to give that support.

[alexrudloff]

These are all really great points, @larry, and I agree that measuring against BTC is the only real way to judge.

I do disagree with @jude’s suggestion that this is similar to a Series B, though.

A Series B would signal that outside investors are energized by the project’s traction and see enough upside to commit more capital. This SIP seems like a bit of the exact opposite of that.

It might be necessary for the project to thrive, but thats an important (and honest) thing to acknowledge.

It’d seem far more aligned to allocate a portion of funds from mining to these purposes instead of changing the underlying tokenomics. I’m sure there’s a lot of reasons to not do that, but it seems more correct in terms of incentives. More usage and traction equals more money to fuel things.

[mrwagmi.btc]

I want to formulize a thought into its own post that I’ve been floating around. It originated from concerns presented regarding the SIP-031 Endowment Treasury and its sustainability over time. A handful have expressed concerns that Year 1 funding is super critical given the existing STX token price. The performance over the first couple years all relies on this bazooka approach. But, what if there was another way, a potentially more self-sustaining way, and possibly one that turns it into a more probable growth model.

We can call the “The Stacks Strategy”.

What if the underlying treasury assets could be re-vamped to like a MicroStrategy approach, but on chain, using our own Stacks ecosystem.

Could it extend the runway and also make the endowment prosperous to fund our ecosystem initiatives beyond what we thought was possible?

My concerns:

• Basing in USD or fiat could become more unpredictable with inflation. How will this impact cost of living (CoL) over the next couple years - which then affects the cost the treasury absorbs.

• How does this impact our native $STX token and the greater crypto market at whole, cycle to cycle?

• How can we remain resilient, cycle to cycle, and make this last the longest?

What if our Treasury Endowment moved to a $SBTC standard, our 1:1 pegged Bitcoin. Upon an initial acquisition of funds, $SBTC was procured, then HODLED.

Upon the creation of the Treasury Endowment (external entity), it were to also be tokenized to represent the utility and functions of this group. With tokenization, it serves as another resource and gauge of the community sentiment in carrying their affiliated duties of marketing, development, operations, etc.

Every quarter, when the Treasury Endowment needs funds for marketing, operations, etc. they borrow against the $SBTC via Dapps in our ecosystem and receive $USDH, the Bitcoin backed stable by the Hermetica team.

Those funds are then made available for doing business. They could be swapped to USDC which is more widely acceptable until USDH options are available more widely.

Then, key part here, The Endowment Treasury would then also issue more debt in the form of it’s token noted above to procure more $SBTC for its treasury.

In my opinion, this could very well be an unseen innovative approach the entire crypto ecosystem has yet to see… I wonder what kind of marketing buzz this could create? Also, as you may have seen a lot of these Bitcoin Treasury companies are creating a lot of buzz in the world and at the recent conference. To me, I’m quite intrigued by this option as an investor. The traditional Bitcoin treasury companies are in essence providing “Paper Bitcoin” as I understand? With this potential option, our Endowment Treasury would be providing on chain transparency.

Per Satoshi Nakamoto’s original forum posts, he noted “crypto proof” as a goal rather than “trusting” centralized entities. This sounds like it aligns more to that ethos, don’t you you think? We are the pioneers. We build on Bitcoin. We have a whole ecosystem now. This could be that next step in demonstrating to the world - Why Stacks and How Stacks Further Aligns To Satoshi’s vision.

So, to me, its a question of:

• How confident are you in the future of Bitcoin?

• How confident are you in our technology, $SBTC, $STX, and $USDH?

• How confident are you in fiat?

I’m not a financial or legal expert, so we would need to funnel this up to the appropriate eyes to validate.

But, if its viable and supported this could:

• Extend our runway.

• Attract eyes as a new offering within the Stacks ecosystem.

• Go beyond extending the bazooka runway approach and provide more resources:

• to fund more marketing over time.

• to fund more development over time.

• to fund more operational needs, etc.

Ideally, by basing in a $SBTC Standard, hopefully we would never have to re-visit the idea of increasing the supply of $STX in the future for additional funds. With this treasury approach, the goal is to have our treasury support itself and provide more support to the Stacks ecosystem.

What do you think?

Please debate, critique, and share with the math wizards and legal guru’s.

[fabohax]

As a Stacks builder and long-time developer, I strongly support this SIP. I believe many devs are eager to contribute to the growth of the ecosystem — but at the end of the day, they’ll prioritize projects that can support them financially.

Here in Buenos Aires, there’s a strong developer community. This November, DevConnect by Ethereum is happening, and there’s a lot of excitement building around it. I’m convinced that sustainable growth depends on a steady stream of incentives and a stable foundation that allows well-intentioned developers to build real solutions on Stacks.

We’re building for scientific progress and the survival of humanity. Let’s not forget that meaningful innovation often requires taking some risks. It would also be important to include a budget for Bitcoin adoption efforts, since that’s at the heart of Stacks’ vision. We should be proud that, while Stacks has a company structure, it’s also rooted in a principled community.

Let’s keep pushing the ecosystem forward. From what I see, this isn’t a risky move — it’s a well-considered one. I’ve been reading the critiques, and I’m glad they’re being taken seriously. Dissenting voices make us stronger.

Building is the way!

[mrwagmi.btc]

Logging an idea here that Davek expressed on a space that I think would be very beneficial and efficient. He mentioned common needs that surface for builders such as: needing a server, audit, or other resources. If there were a way to mitigate/reduce these costs for new builders it would be extremely helpful.

It got me thinking. What if we had a Stacks (GPO) Group Purchasing Organization, therefore, these common needs could be negotiated at scale to secure better pricing and formalized onboarding. Whether this on the table for the Endowment or an organization/entity that arises out of the ecosystem itself.

[fabohax]

Servers, audits and other resources are important but, if taked, must be from a planning perspective. It sounds like those can be run by devs themselves and doesnt requires much budget, maybe a way to promote auditing offices especialized in Stacks would be great benefitial, idk of those others really need a Group dedicated specifically to it.

Lets put funds smartly. I just heard yesterday that Stellar gave 15K to a group in Chile that no one of them are devs and even didn’t know how to make that app. LOL, well, maybe it’s a joke.

[LNow]

@alexlmiller let’s assume for a brief moment that this SIP will not pass. In that case how much runway both Hiro and Stacks Foundation have left to continue their operations?

[howardmarin]

Very creative idea. I think this is one year out on the timing side. My feeling is that there is a pressing need to execute on the roadmap to achieve clear leadership in the Bitcoin extended ecosystem. However, seriously discussing a plan to move into a $BTC Standard will mute some of the criticism about centralization and control. Active discussion will also help build momentum and create better publicity for Stacks.

[howardmarin]

I agree that censorship resistance should be a clear goal for Stacks. “Can’t be Evil” For now, the political winds are favorable, so going for that goal makes sense. Perhaps we can build out so quickly and successfully that Stacks will be strong enough to withstand a major attack? I lack the ability to determine that, but I would enjoy hearing your technical take, assuming everything on the roadmap (including trustless or 1ofN bridging) gets implemented within 2 years.

[mrwagmi.btc]

Just a heads up. I see news circulating that Polkadot and Cardano are now going to pursue a similar strategy. Wonder if they’re watching.

[HeroGamer]

I’ve followed the progression of SIP-031 and SIP-031.1 closely, and after sending some feedback to the SIP authors earlier in the process, I want to acknowledge areas where I believe important progress has been made — and also leave my thoughts on where I think the community should keep its attention in the future.

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Encouraging Improvements

1. Treasury Committee (TC) Selection
There have been meaningful improvements in governance clarity and in the process for selecting the Treasury Committee. I’m especially encouraged by how rigorous the Appointment Committee process has been. The final nominee list looks strong — and beyond this SIP, it could serve as a valuable reference point for forming future community committees or reserve teams for TC. I feel confident about this part.

It’s also worth highlighting that the initial draft proposed 5 keyholders and only 4 community-appointed seats — a structure that could have allowed community voices to be consistently outvoted. That has now shifted to 4 keyholders and 5 community-appointed seats, removing the risk of keyholder majority control. This update better reflects the community-first governance spirit that Stacks aims to uphold.

2. Support for Governance Funding
I’m glad to see up to $500K USD explicitly committed to sustaining decentralized governance efforts. As other parts of the ecosystem scale, governance and the SIP process must scale as well — both in capacity and capability. It’s foundational infrastructure that must evolve in step with the rest.

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Fiscal Discipline and Runway

1. Financial Discipline Matters
Even with the best teams, best programs, best products, strong integrations, and solid PMF — if financial discipline isn’t baked in early, spending can easily outpace results. When that happens, momentum can stall quickly.

The Treasury must be managed with a long-term mindset: not just to unlock rapid activation, but to preserve resources over time. Without sustainable and well-managed cash flow, the ecosystem can quickly find itself out of ammo. Plenty of great Web2 companies have gone bust due to cash flow problems — and crypto is no different. I hope the CIO hire will bring strong persistent financial discipline experience to the table.

2. The Most Important Sentence in SIP-031 for Me
The most important line in the entire proposal appears in the LINK SIP-031 - Potential Risks section:

“Should STX remain below $1 for an extended period, the Endowment may need to scale back spending or extend its fundraising timeline to preserve capital and uphold fiscal discipline.”

This one sentence captures the heart of what matters during market downturns: the ability to make hard decisions — to pause or reduce spending when conditions are unfavorable or when fundraising falls short — is essential.

Closely tied to that is the need for long-term runway visibility. I appreciated the inclusion of the Nomiks report, with its financial projections and funding gap scenarios (@Resh brought up before). Grounding strategy in forward-looking modeling like this is critical for helping the ecosystem pace itself wisely.

Read the Nomiks Treasury Report → https://forum.stacks.org/uploads/short-url/pgKEv8ljXuWpCC1GnkyIi3pD8SV.pdf

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Forward Outlook
Overall, I’m supportive of SIP-031 and the direction it sets.

What will matter most is execution: how spending is managed, how the Endowment adapts to real-world conditions, and whether we maintain financial discipline through both bull and bear markets.

Spending with intention and staying within our means gives the ecosystem the best shot at durable, long-term success.

[andrewsaul]

a16z backed FTX, and encouraged others to do so. I don’t think they much of a leg to stand on when it comes to telling people about due process.

There’s been 100x the waste per dollar in traditional companies over DAOs/Foundations.
DAOs and Foundations are direct competitor to VCs like a16z as they remove them as gatekeepers to asset allocation, especially for early stage businesses.

Many VCs in Silicon Valley and elsewhere in the US would like to keep it business as usual when it comes to funding early stage companies and enjoyed the out-sized rewards from that.