Stake DAO

Stake DAO aggregates vote-escrow positions (Curve, Balancer, Frax) via liquid lockers and strategies. SDT governs the protocol; lockers retain voting rights for depositors while enabling liquid exposure.

Liquid locker + vote-aggregator spanning multiple vote-escrow ecosystems with on-chain strategies over locked governance positions.

- Liquid Lockers: Users deposit vote-escrow governance tokens (CRV, BAL, FXS, PENDLE, ANGLE, etc.) and receive liquid, transferable sdTokens (sdCRV, sdBAL, sdFXS, sdPENDLE...) in return. The protocol perpetually re-locks the underlying at max lock, so sdTokens retain governance power, maximized yield, and vote-incentive rewards without the user having to lock. sdTokens remain liquid via DEX pools, so holders can exit to the underlying without waiting for a lock to expire. - Strategies / Vaults: Auto-compounding vaults that deposit LP tokens (e.g. Curve, Balancer, Pendle LPs) and leverage the protocol's aggregated veToken balances (from the Liquid Lockers) to earn boosted rewards across multiple chains, socializing the boost among depositors. - Votemarket: A permissionless on-chain vote-incentive (bribe) marketplace where protocols create campaigns paying token rewards in exchange for gauge votes, and voters claim the incentives. Votemarket v2 (launched Nov 2024) uses storage proofs and an Arbitrum L2 architecture to cut gas, supports multi-week reward distribution (no weekly claims), covers both direct veToken holders and wrapper voters (vlCVX/vlAURA), and adds fallback strategies and point-based incentives. - SDT / veSDT / vlSDT: SDT is the protocol's governance and value-capture token (100M max supply). Historically SDT was locked into veSDT (vote-escrowed, decaying) to boost sdToken voting power up to 2.5x and to govern the DAO. In 2026 governance approved a migration to vlSDT (vote-locked SDT): 1 SDT staked = 1 non-decaying voting/boosting unit, no fixed lock, with an 8-week exit queue (or instant exit with penalty).

- Stake DAO (SDT) — Token, Governance token - sdCRV (sdCRV) — Receipt, Stake DAO Liquid CRV - sdBAL (sdBAL) — Receipt, Stake DAO Liquid BAL - sdFXS (sdFXS) — Receipt, Stake DAO Liquid FXS - sdPENDLE (sdPENDLE) — Receipt, Stake DAO Liquid PENDLE - sdANGLE (sdANGLE) — Receipt, Stake DAO Liquid ANGLE

- Smart Contract: Complex multi-product Solidity codebase (Liquid Lockers, strategy vaults, Votemarket, cross-chain messaging). A bug or logic flaw in any component could cause loss of user funds; realized as the May 2026 vsdCRV exploit where forged cross-chain minting occurred. - Counterparty: Deployer/admin key and privileged-role compromise risk. The 27 May 2026 exploit stemmed from a compromised deployer private key used to manipulate the LayerZero v2 OFT peer configuration, showing that key management and admin privileges are a critical trust assumption. - Network: Cross-chain / bridging dependency. Products rely on cross-chain messaging (LayerZero OFT, storage-proof oracles bridging mainnet state to Arbitrum). Failure, forged messages, or misconfiguration of this infrastructure can create fake tokens or break reward accounting, as seen in the vsdCRV incident. - Systemic: Heavy dependence on the underlying vote-escrow ecosystems (Curve, Balancer, Frax, Pendle, Angle) and the broader 'Curve wars'. Emission cuts, veToken model changes, gauge deprecation, or declining demand for vote incentives directly reduce sdToken yields and Votemarket revenue. - Reserve / Depeg: sdTokens (sdCRV, sdBAL, etc.) can trade below the value of their underlying because they are perpetually locked and only redeemable via secondary DEX liquidity, not 1:1 native redemption. A liquidity crunch or loss of confidence can push the sdToken market price to a persistent discount to the underlying. - Governance: Concentrated locked-token voting (veSDT/vlSDT) governs fees, gauge/boost allocation and product parameters. Voting-power concentration or a contentious migration (e.g. veSDT to vlSDT) could steer the protocol against some stakeholders' interests.

- Actively-managed asset manager / index fund over governance positions: similar — Like an asset manager pooling client capital to run a strategy, Stake DAO pools users' governance tokens, locks them at maximum efficiency, and manages the aggregated voting/boost position to maximize yield returned to depositors, taking a performance fee.; differs — Non-custodial and on-chain: users always hold a liquid, redeemable sdToken and retain the ability to exit and to influence governance, with strategies enforced by public smart contracts rather than a discretionary manager or custodian. - Lobbying / proxy-vote-advisory and pay-to-influence marketplace: similar — Votemarket is analogous to a marketplace for buying influence over collective decisions: campaign creators pay to steer emissions (votes) the way a firm might pay a lobbyist or use proxy advisors to sway shareholder votes.; differs — Fully permissionless, transparent and on-chain; anyone can post or claim incentives, pricing of votes is set by open market bidding, and settlement is enforced by smart contracts rather than opaque private arrangements.