Abdullah_Mian

Purpose & Value Proposition
StakeStone addresses a key DeFi challenge: liquidity is often siloed within individual blockchains, leading to inefficient capital deployment and fragmented yield opportunities. The protocol acts as a foundational layer that aggregates and routes liquidity across more than 20 networks (CoinMarketCap). This omnichain approach allows users to stake major assets like ETH and BTC from any supported chain and earn optimized yields without sacrificing liquidity, effectively turning static holdings into productive, cross-chain capital.
2. Tokenomics & Governance
The STO token is the cornerstone of StakeStone's decentralized governance. Holders can lock their STO to receive veSTO (vote-escrowed STO), which grants proportional voting rights (StakeStone Docs). This model incentivizes long-term alignment, as veSTO holders vote on critical protocol parameters, direct emissions to liquidity pools, and earn a share of bribe rewards. A portion of STO used for bribes is burned, creating a deflationary pressure that benefits all token holders.
3. Ecosystem Fundamentals
The protocol’s utility is delivered through a suite of products. STONE is a non-rebasing, yield-bearing token that represents staked ETH; its value accrues internally, and it can be bridged and used across chains (StakeStone). SBTC and STONEBTC offer similar functionality for Bitcoin. LiquidityPad allows protocols and ecosystems to create customized liquidity vaults, targeting specific yield strategies. StakeStone has expanded into stablecoin utility, launching yield vaults for USD1 and outlining a "neo-bank" vision for payment products.$STO
#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges

Imagine a digital world where most crypto projects are like towers built on sand—quick to rise, but just as quick to fall. Every day, new tokens appear, promising huge gains, but very few actually build something solid.
Now enter Stack Stone.
I think of it like a group of builders who were tired of seeing weak structures collapse. Instead of chasing trends, they decided to stack stones carefully—one by one—to create a strong foundation.
That’s where the name comes from:
Stack (building step-by-step) + Stone (strength and stability).
What Stack Stone Tries to Do
In this story, Stack Stone isn’t just another coin—it acts like a foundation layer.
I remember reading that its goal is to focus on things like:
Stability over hype
Structured growth instead of sudden pumps
Real utility in the ecosystem (not just trading)
It’s like building a house. Most projects focus on painting the walls (marketing), but Stack Stone focuses on laying bricks properly first.
The Role of $STO Token
In this world, the $STO token is like the stone itself.
People use it to:
Participate in the ecosystem
Support network activities
Potentially earn rewards (depending on the system design)
Instead of being just a “buy and sell” asset, it tries to become something you use, not just hold.
The Vision
I think the real idea behind Stack Stone is simple but powerful:
“If you build slow, strong, and transparent… people will trust you.”
That’s something missing in crypto.
Many projects rush to get attention. Stack Stone, at least in concept, tries to earn trust over time—like a structure that becomes stronger with every added stone.
The Reality Check
But here’s the honest part of the story.
Not every project that sounds strong actually succeeds. In crypto:
Some foundations crack
Some builders disappear
Some ideas never get fully built
So while Stack Stone aims to be solid, its future depends on:
Execution
Adoption
Community trust
#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges $STO

Comprehensive Cross-Chain Solution: StakeStone is not just a staking or bridging service but a complete cross-chain liquidity infrastructure. It integrates liquid staking, cross-chain interoperability, and yield optimization into one platform, which is unique among competitors.Multi-Asset Support: Unlike competitors that focus only on ETH or specific assets, StakeStone simultaneously supports ETH and BTC through STONE and SBTC/STONEBTC, providing diversified liquidity options that allow users to more effectively manage and optimize their portfolios.Modular Architecture: StakeStone’s modular design allows for flexible adjustment of its underlying strategies without affecting users’ STONE tokens. This architecture provides great flexibility for adapting to market changes and integrating new opportunities, while many competitors have more rigid designs.Seamless Cross-Chain Experience: Many competitors require users to manually bridge assets between different chains, while StakeStone provides a true cross-chain experience, enabling users to access and use their assets across multiple chains while maintaining the yield on underlying assets.Yield Optimization Strategies: StakeStone’s underlying strategy pools automatically optimize yields without relying on users for active management. In contrast, many competitors require users to manually move assets between different protocols to maximize yields.Deep Ecosystem Integration: Through strategic partnerships with emerging ecosystems like Berachain, Linea, Monad, and Plume, StakeStone has established a strong partner network, enhancing the usability and adoption of its products.Innovative Governance Model: StakeStone’s gauge-based governance model and seasonal reset mechanism create a fairer, more inclusive decision-making process that prevents long-term holders from dominating governance, which many competitors lack.#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges $STO

StakeStone’s Main Competitors
1. Liquid Staking Services
Lido: Currently the largest ETH liquid staking platform, providing liquid staking through stETH tokensRocket Pool: Provides decentralized ETH staking servicesFrax Finance: Offers liquid staking services through frxETH
2. Cross-Chain Liquidity Protocols
LayerZero: Provides cross-chain messaging and asset bridgingAxelar: Focuses on cross-chain interoperabilityWormhole: Offers cross-chain bridging services
3. Bitcoin DeFi Solutions
Babylon: BTC staking protocolSymbiotic: Bitcoin restaking network#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges $STO

As the cryptocurrency industry evolves, StakeStone has formulated ambitious plans to maintain its leading position in the liquidity infrastructure sector. Here are the key directions for StakeStone’s future development:
1. Stone.Pay Payment Application Expansion
StakeStone is developing a full-featured payment application named “Pebbles,” scheduled for full launch in Q3 2025, with the following features:
Full support for EIP-7702Smart savings that produce consistent yieldsAI-driven financial analytics tailored to individual economies
2. Cross-Chain Service Expansion
StakeStone plans to expand its cross-chain liquidity services to a wider range of RWA (Real World Assets) and high-performance chains in Q4 2025 and beyond:
Expanding the availability of STONE and SBTC on more blockchainsIncreasing support for emerging blockchain ecosystemsDeepening integration with existing partners
3. Governance Decentralization Evolution
StakeStone has planned a gradual transfer of governance power from the team to the community:
Initially, the StakeStone team will configure the DAO and retain management control of contractsOver time, this power will transition to the StakeStone DAOEventually, governance will be fully managed by veSTO token holders
4. SBTC and STONEBTC Product Innovation
StakeStone plans to innovate its STONEBTC product in Q3 2025:
Integrating with CeDeFi and RWA to better support sustainable and optimized yieldsExpanding Bitcoin’s utility in DeFi#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges $STO

1. The Contradiction Between Asset Locking and Liquidity
Traditional staking models require users to choose between yield or liquidity. Individual stakers want to secure risk-free staking returns but also want to participate in liquidity mining for additional yield, creating a dilemma where users must choose between providing liquidity (LP) or staking, thus incurring opportunity costs.
2. Fragmented Liquidity
With the emergence of various LRT (Liquid Restaking Token) pools, users often face complex and disconnected experiences. The introduction of new tokens and the complex process of managing liquidity across multiple platforms increases the complexity of the user experience.
3. Challenges Faced by Layer 2 Networks and EVM-Compatible Blockchains
Emerging L2s and other blockchains struggle to attract ETH liquidity because users are unwilling to give up staking yields available on Ethereum. If users transfer ETH to these new chains, they lose the 4-15% “risk-free” yield available on Ethereum. This opportunity cost makes it difficult for new blockchains to obtain sufficient ETH liquidity to develop their ecosystems.
4. Integration Difficulties for Developers
Developers face multiple challenges when integrating Liquid Restaking Tokens (LRTs), mainly because projects frequently introduce new token symbols, making the integration process complex and inefficient. Additionally, cross-chain ETH integration is particularly difficult because accurate price data depends on oracles. Rebase tokens (like stETH) with automatically adjusting supply are especially difficult to handle in cross-chain environments, making it hard for developers to create stable systems and hindering truly seamless cross-chain experiences.#DriftProtocolExploited #ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges $STO

On January 3, 2009, at 18:15:05 UTC, the very first Bitcoin block, known as the Genesis Block (Block
#0) was mined. To express his discontent with the banking system, Satoshi Nakamoto embedded a
message in this inaugural block:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
That moment captured a bold vision for change. Sixteen years later, while banks still dominate,
Bitcoin’s meteoric rise and the unstoppable momentum of blockchain innovation have pushed the world
toward a new financial paradigm—one that’s open, programmable, and unstoppable.
As shown in Image 1, the core functions of traditional banks can be grouped into three main areas:
• Custody: Safeguarding users’ funds through deposits and settlement services.
• Credit: Lending depositors’ money to borrowers through credit operations.
• Payments & Clearing: Facilitating the transfer of funds between different accounts and institu-
tions.
These functions are, by nature, intermediary roles, relying on centralized banks and clearing insti-
tutions to operate. Figure 1 illustrates how banks and clearing institutions currently collaborate in
cross-border payment systems. However, the legacy system was designed as a patchwork of separate
banks, each with limited trust and coordination, it inevitably starts facing inefficiencies that shape
many of today’s banking challenges.
1.1 An Expensive System by Design
The traditional banking system wasn’t built to be lean. Banks shoulder hefty operational expenses
across IT infrastructure, compliance, staffing and branch networks, and the complex coordination costs
of upstream and downstream industry chains. These costs ripple through the entire system, leading 1.1.1 The Unbanked and Underbanked
Even in 2024, 21% of adults worldwide have no bank account. Many banks require minimum deposits
just to break even on operational costs, effectively shutting out lower-income users. And for those who
do have accounts, up to 30-60% are underbanked, unable to access loans, remittances, or investment
services without turning to alternative financial services. (Source: Lucidity Insights)
1.1.2 Friction Costs: A Hidden Drain on Profits
In today’s banking landscape, every financial transaction carries a hidden layer of friction. Because
each bank operates as a separate entity with limited mutual trust, funds must often pass through third-
party clearinghouses to reach their destination. While this structure helps ensure security, it introduces
complex and layered fee mechanisms. Businesses must absorb fixed fees, percentage charges, and
intermediary costs, as well as hidden foreign-exchange losses. This is especially pronounced in cross-
border payments, where currency conversion fees, bank processing charges, and card network fees stack
on top of each other. The result is an opaque and unpredictable cost structure that makes accurate
forecasting difficult and gradually eats into corporate margins, becoming a significant barrier to global
business growth.
1.2 Efficiency Bottlenecks
Today’s banking infrastructure remains deeply tied to manual workflows and legacy operations, making
speed and efficiency hard to achieve at scale. Take international remittances as an example: Transfers
usually take 1 to 5 business days to clear. But with added compliance steps, multiple intermedi-
ary banks, or complex routing, that timeline can stretch to 1–2 weeks. A closer examination below
illustrates what drives these delays reveals a complex web of structural constraints:
Factor A: Initiation Time/Bank Cut-Off Times
Effects A: Transfers submitted after the bank’s daily cut-off time are rolled over to the next business
day.
Factor B: Number of Intermediary/Correspondent Banks
Effect B: If there is no direct channel between the sending and receiving banks, the transfer must
pass through multiple intermediary banks, and each step introduces additional delays.
Factor C: Currency Conversion & Forex
Effect C: When currency conversion is involved, settlement often depends on FX market hours,
which can postpone the final settlement.
Factor D: Compliance & AML
Effect D: Large or higher-risk transfers are more likely to trigger manual reviews, significantly
increasing processing times.
Factor E: Receiving Bank Processing Speed
Effect E: Even after funds reach the receiving bank, internal clearing and crediting checks can
further delay the time until the funds are available.
Factor F: Public Holidays/Weekends/Differences in Working Days Across Countries
Effect F: Cross-border transfers are especially vulnerable to differences in weekends and public
holidays across countries; one non-working day can halt the entire chain.
Factor G: Banking Infrastructure and Legal Frameworks of Sending/Receiving Bank
Effect G: Mature financial systems process transactions more quickly, while stricter or less mature
infrastructures tend to cause slower settlements. All of this points to one conclusion: the inefficiencies
built into today’s banking system are structural, not accidental. Without system-level upgrades and
process overhauls, no amount of fine-tuning will make the system truly faster.
1.3 Disparities in Access to Global Financial Opportunities
Inequality in financial access plays out on two fronts. In financially developed regions, premium
investment opportunities are largely reserved for the wealthy. Institutions such as private banks,
hedge funds, private equity firms, and family offices typically set high investment thresholds, pricing
out ordinary investors. Those with moderate wealth often find themselves locked out of top-tier asset
allocation opportunities, deepening the wealth gap over time. Meanwhile, in less developed markets,
2 Figure 2: Image 2
weak infrastructure and limited professional capacity results in fewer options for diversified, high-
quality investment channels. Many are left to rely solely on basic savings methods or risky alternatives.
Incomplete regulatory frameworks and unfavorable market conditions also make it difficult to attract
capital and innovative financial products, further deepening the global divide in financial opportunity.
1.4 Why Traditional Banking Wasn’t Built for AI
Banking was built for a different era, one of slow, manual processes and overnight reconciliations. The
AI and machine economy couldn’t be more different.
On the technical side, most banks still run on COBOL-based mainframes and rely on batch pro-
cessing, a model built for nightly reconciliations, not real-time execution. Bank data is scattered
across siloed business lines, inaccessible to AI models that depend on clean, structured, real-time in-
puts. Scaling centralized infrastructure to meet AI’s compute needs requires expensive, slow-to-deploy
physical upgrades.
On the operation side, manual processes still dominate in traditional banking. Loan approvals,
compliance checks, and risk management all rely heavily on human intervention. Transaction flows are
complex and involve third party intermediaries, making them poorly suited for instant M2M payments.
Even the way banks are designed—around occasional, high-value transactions—runs counter to the
high-frequency, real-time, microtransaction patterns of the IoT economy.
Legacy banking was built for a world of low-frequency, high-value, human-led batch operations.
The AI era runs on speed, scale, and automation. This structural mismatch makes it difficult for
traditional banking systems to operate efficiently in the age of AI and machine intelligence.
The chart in Image 2 highlights just how different traditional banking is from the AI and computer-
driven economy across six dimensions:
• Transaction Frequency: Banks are built for low-frequency usage; machines demand constant,
high-frequency interactions.
• Transaction Size: Traditional banking focuses on large, batch transactions, while the AI/machine
economy is characterized by small, instant payments.
• Processing Model: Banking still depends on batch cycles; AI requires real-time processing.
• Human Dependence: Legacy workflows lean on manual approvals; the machine economy thrives
on automation.
• Data Structure: Banks lock data in silos; AI needs open, connected data environments.
3 • Scalability: Traditional infrastructure expands slowly; the machine economy expects rapid, on-
demand scale.
In short, banking was built for a world of low-frequency, high-value, human-led batch operations. The
AI economy runs on the opposite logic — high-frequency, small-value, real-time, automated flows. The
design logic of centralized banking is almost the mirror opposite of what the AI era requires.
2 Banking 2.0: The Crypto-Native Upgrade
The Internet once reshaped how we imagine banks. If traditional banks had never existed, how would
we design a bank fit for the digital age? This inspired the emergence of neo-banks like Revolut and
Monzo, digital platforms that improved traditional banking through better UX and efficiency. However,
their core architecture remained tied to the legacy banking system.
Today, blockchain evolution prompts StakeStone to ask the same question: without legacy banks,
how would we build a future-ready and decentralized financial system for the blockchain era? Stake-
Stone’s answer is the Crypto-native Neo Bank — a blockchain-based financial infrastructure that
replaces centralized intermediation with programmable, trustless systems.
• Settlement Layer: High-performance blockchain networks provide native clearing and settlement.
• Identity Layer: Intuitive identity solutions enable fully self-custodied on-chain accounts.
• Interaction Layer: Account Abstraction supports native on-chain smart operations.
• Intelligence Layer: With AP2(Agent Payments Protocol) and x402, StakeStone’s system is fully
compatible with AI agents and machine payments.
This architecture empowers human and machine agents to transact globally with real-time, low-
cost, and secure settlements, forming the cornerstone that we believe as the future of an autonomous
and borderless financial era.
2.1 Account and Identity Layer
A key pillar of a Crypto-native Neo Bank is a reimagined Account and Identity infrastructure, the
foundation of a new financial paradigm. Built on frontier innovations such as EIP-7702, Social Login,
and Gasless infrastructure, it redefines what a financial account can be.
These modules collectively define the architecture of future financial accounts, evolving beyond
traditional wallets to support a shared financial account system across both human and AI agents.
Our Account & Identity layer ensures compliance and security while delivering a truly frictionless
financial experience.
2.1.1 EIP 7702: Smart Functions for Self-Custodies EOAs
EIP-7702 is a key proposal in Ethereum’s Account Abstraction roadmap. It allows traditional Exter-
nally Owned Accounts (EOAs) to temporarily gain the capabilities of smart contract accounts without
changing addresses or migrating assets.
Through EIP-7702, user accounts can dynamically load smart logic within a single transaction,
enabling contract-level permissions and automated execution. This evolution transforms accounts
from passive asset containers into programmable financial agents capable of policy enforcement and
intelligent responses.
Within StakeStone’s Crypto-native Neo Bank architecture, EIP-7702 upgrades static wallet ac-
counts to active entities, enabling:
• Dynamic feature upgrades: enable smart contract functionality in any transaction without asset
migration.
• Programmable security: integrates multisig, limits, and freeze policies at the account level.
• Automated asset management: trigger portfolio reallocation based on preset conditions (e.g.,
yield or FX changes).
• Institutional-grade accounts: enable role-based authorization, risk controls, and compliance.
EIP-7702 thus serves as a cornerstone for the Crypto-native Neo Bank, enabling smart account capa-
bilities and programmable finance without compromising self-custody.
4 2.1.2 Social Login: Frictionless User Onboarding via Identity Abstraction
Web3 wallets traditionally require users to manage seed phrases and interact with complex transaction
flows, posing as a major usability barrier. Social Login solves this by integrating Web2 authentica-
tion (Google, Apple ID, X, etc.) with MPC- or smart-contract-based key management, delivering a
seamless, self-custodied blockchain experience.
As a core module of StakeStone’s Identity Abstraction Layer, Social Login provides:
• Frictionless account creation: one-click onboarding using existing social credentials.
• Private Key fragmentation: private keys are split and stored via distributed cryptography.
• Accounted = Identity: on-chain accounts double as user identities for built-in KYC/AML sup-
port.
• Privacy-preserving compliance: zero-knowledge proofs enable verifiable compliance without data
exposure.
By abstracting away blockchains technical barriers, Social Login enables true mass adoption, bridging
the simplicity of Web2 with the autonomy of on-chain finance.
2.1.3 Gasless: Frictionless Transactions
Conventional blockchains require users to hold native tokens for gas fees, a requirement that not only
raises the entry barrier but also limits mainstream usability. Gasless transactions solve this by using
relayers or protocol-level gas sponsorship, enabling users to interact on-chain without needing to handle
network fees.
Within the StakeStone architecture, Gasless transactions integrate deeply with EIP-7702 and Social
Login, forming a complete Identity–Account–Transaction loop:
• Account-level gas abstraction: smart accounts automatically sponsor or manage gas on behalf of
the user, enabling zero-friction interactions.
• Multi-token fee abstraction: users can pay fees using any stablecoin or other cryptocurrencies,
not just the native token of a given chain.
• Optimized for institutions & IoT: ideal for high-frequency, low-value transactions such as retail
micro-payments and machine-to-machine settlements.
• Seamless UX: users onboard, transact, and manage assets with zero exposure to blockchain
internals.
By abstracting away gas fees while maintaining transparency and composability, Gasless transactions
bring Web2-grade usability to Web3-native finance.
2.2 Yield Layer
Within StakeStone’s Crypto-native Neo Bank, the Yield Layer serves as the central bridge connecting
onchain assets with underlying yield sources.
Our Yield Layer supports two implementation paths based on asset type:
• For non-yield-bearing assets such as BTC and stablecoins, StakeStone employs a combination of
smart contracts, custodial infrastructure, and multi-exchange strategies to convert deposits into
onchain, verifiable yield-bearing tokens: STONEBTC and STONEUSD. Automated mechanisms
manage yield distribution, NAV updates, and synchronized settlement across various execution
layers (L2s, centralized exchanges, and custodial venues).
• For natively yield-bearing assets such as ETH, StakeStone utilizes staking and restaking protocols
through smart contracts to generate native onchain yield. Returns are represented and settled
via STONE (StakeStone Ether), a yield-bearing token.
5 2.2.1 STONEUSD/STONEBTC
Deposit & Mint After completing on-chain KYC/KYB verification, users can deposit stablecoins
(e.g., USDC, USDT) or wrapped BTC (e.g., BTCB) into their yield-bearing accounts.
All deposit transactions are routed through the StakeStone Router Contract, which aggregates
incoming funds and allocates them to the corresponding Custody Wallet and Strategy Pools based on
the system’s yield optimization logic.
Once the deposit is confirmed, the smart contract executes the minting process:
• Based on the current Exchange Rate (denoted as R), the contract mints a corresponding amount
of LP tokens (STONEUSD or STONEBTC) serving as yield-bearing certificates.
• The user’s holdings of STONEUSD or STONEBTC represent their share of the total yield pool,
redeemable at any time.
• The Exchange Rate updates periodically based on realized yields from custody and execution
layers, forming a transparent and traceable on-chain yield record.
Delegation & Strategy Execution Once funds enter the custodial layer, the system automatically
allocates them across multiple yield sources according to predefined strategies:
• Ceffu Custody Accounts: Serve as the primary liquidity pool, receiving and redistributing funds
from multiple users.
• Exchange Accounts (Binance, OKX, Bybit, etc.):
– Funds are mirrored automatically from custody to exchange sub-accounts (e.g., A-1, A-2,
A-3, B-1, B-2, B-3. . . ).
– Each sub-account may correspond to a distinct strategy execution unit, presently dedicated
to neutral arbitrage strategies.
• Yield Distribution Logic:
– Arbitrage partners or exchanges periodically update performance metrics, including PnL,
interest, and fees.
– Smart contracts perform scheduled on-chain settlements to distribute yields proportionally
and transparently.
Following each settlement period, the system issues an Exchange Rate Update, updating new data to
the main contract, ensuring STONEUSD / STONEBTC values are accurately reflected in the next
cycle.
Withdrawal & Settlement When a user initiates a withdrawal, the system redeems assets based
on the latest Exchange Rate and coordinates onchain settlement by recalling funds from custody and
exchange accounts.
• Withdrawal Request & Verification: Users submit withdrawal transactions via smart contract.
The system verifies their KYC status, the STONEUSD / STONEBTC balance and compliance
limits, and generates a unique Request ID for the redemption order.
• Exchange Rate Calculation & On-chain Snapshot: The contract determines the redemption
amount using the current Exchange Rate and performs an onchain snapshot to ensure consistency
between the redemption value and the current accounting cycle.
• Custody Undelegation & Fund Return: The backend server calls custodial platform’s (e.g., Ceffu)
APIs to execute undelegation of funds. Exchange sub-accounts (Binance, OKX, etc.) automati-
cally close market-neutral arbitrage positions, after which funds are transferred back to the main
custodial wallet.
6 • Settlement & Distribution: Custodians send back yield and fund settlement data to the system,
which then issues an Exchange Rate Update. The smart contract burns the corresponding
STONEUSD / STONEBTC and releases the equivalent underlying assets to the user’s wallet.
• Settlement Archival & Risk Synchronization: The backend records a settlement snapshot for the
current cycle, while the risk management module updates liquidity pool and liquidity coverage
ratio, completing the redemption feedback loop.
Cross-layer Coordination & Safeguards The Yield Layer within StakeStone’s Crypto-native Neo
Bank is a multi-layered, multi-strategy execution network designed for both efficiency and transparency.
• L1: STONE token issuance, Exchange Rate and Settlement;
• L2/ App Chains: Distribution of yield bearing tokens through liquidity pools;
• Custodial & Exchanges: Yield generation and asset security;
• AI Risk Engine: Continuously monitors fund movements and yield volatility within custody
accounts.
This design allows StakeStone to operate a multi-layered yield generation network with transparency
on-chain, efficiency off-chain, and seamlessly coordinated across all layers.
2.2.2 STONE: StakeStone Ether
Within StakeStone’s Crypto-native Neo Bank architecture, STONE (StakeStone Ether) serves as the
yield-bearing token for Ethereum-native assets (ETH).
Unlike STONEUSD and STONEBTC, which depend on custodial infrastructure and cross-layer
settlement, STONE’s yield is generated onchain from staking and restaking protocols within the DeFi
ecosystem. The entire process, from yield generation and distribution to Exchange Rate synchroniza-
tion, is executed onchain through smart contracts.
Deposit & Mint Users deposit ETH directly into the StakeStone smart contract, where the Stake-
Stone Vault acts as a liquidity buffer, temporarily receiving deposited ETH to optimize capital uti-
lization and operational efficiency.
Upon deposit, the protocol automatically executes the minting of STONE, while the deposited
ETH remains in the Vault. Once the aggregated deposits meet the deployment threshold, StakeStone
Vault allocates and deploys funds to various Strategy Pools:
• The number of STONE (StakeStone Ether) tokens minted is determined by the current Exchange
Rate (R-value);
• STONE represents the user’s share of the ETH yield pool and remains redeemable at any time;
• The Exchange Rate updates periodically to reflect underlying staking and restaking yield rate
changes, maintaining an on-chain yield record.
This architecture guarantees that deposits begin earning yield upon deposit while preserving trans-
parency and smart contract security.
Delegation & Strategy Execution Once assets are deployed to the Yield Layer, the system
distributes funds among multiple Strategy Pools based on pre-determined allocation logic set by the
on-chain governance module OPAP, balancing yield generation and security:
• Base Staking Layer: ETH is delegated to leading Ethereum staking pools or validator operators
to earn native PoS rewards and transaction fees.
• Restaking Layer: By integrating restaking protocols such as EigenLayer and Symbiotic, ETH is
restaked into distributed security networks to obtain additional yield.
7 • Yield Settlement & Distribution: Yield data from each Strategy Pool is automatically consol-
idated and reported to the main contract, which performs unified settlement and produces an
Exchange Rate Update.
• OPAP Strategy Mechanism: The underlying yield strategy of STONE is managed entirely by
the On-chain Proposal Allocation Protocol (OPAP) to ensure transparency and decentralized
governance. Any modification to base strategies requires approval through a vote by STONE
holders before implementation.
Withdrawal & Settlement When a user requests to redeem STONE, the protocol calculates the
amount of ETH to be withdrawn based on the current Exchange Rate and proceeds through the
settlement logic:
1. The contract determines the redeemable asset value according to the Exchange Rate. If the
Buffer Pool balance is sufficient, the user can use the “Instant Withdrawal” option to withdraw
ETH immediately from the buffer pool.
2. If the Buffer Pool balance is insufficient, the user can initiate a “Request Withdrawal”. The
withdrawal request becomes claimable after the protocol completes unstaking operations, secures
sufficient redeemable liquidity, and finalizes the next settlement cycle. The user can then claim
their withdrawal.
3. Whether ”Instant Withdrawal” or ”Request Withdrawal”, the contract burns the corresponding
STONE and releases an equivalent amount of ETH, including both principal and accrued yield.
4. All settlement actions and records are executed fully on-chain, remaining traceable, verifiable,
and auditable.
2.3 AI and Machine Payment Layer
As AI and IoT technologies become ubiquitous, future economic activities will no longer be driven
solely by humans but increasingly by Intelligent Agents that can execute and settle transactions auto-
matically.
The AI & Machine Payment Layer of StakeStone’s Crypto-native Neo Bank is designed precisely
for this purpose: it enables every AI, device, or algorithm to possess a verifiable identity, a funding
account, and payment capabilities, allowing them to function as Autonomous Economic Actors within
the financial system.
This layer integrates next-generation machine payment protocols such as Google’s AP2 (Agents-
to-Payments Protocol) and Coinbase’s x402, forming a fully automated loop from Agent Decision to
On-chain Settlement, and establishing the foundational layer of true MachineFi (machine finance).
In StakeStone’s Crypto-native Neo Bank architecture, the system supports:
• AP2 (Agents-to-Payments Protocol): Defines how intelligent agents generate, transmit,
and sign payment intents.
• x402 (HTTP-based Payment Protocol): Provides a standardized payment authorization
and verification channel, enabling onchain settlement and micropayments without relying on
traditional centralized account infrastructures.
Core Applications:
1. Agent Identity Layer
(a) Each AI or IoT device is assigned an onchain account (e.g., EOA) that registers a unique
identity, which can become a smart account through EIP-7702.
(b) This identity is bound to the device’s StakeStone bank account, permission policies, and
onchain compliance modules (ZK-KYC / AML), forming an Identified Machine Account
(IMA) with verifiable credentials and programmable access control.
2. Payment Intent via AP2
8 (a) The Identified Machine Account (IMA) can create an Intent Mandate via the AP2 protocol,
authorizing automated payment actions under predefined conditions.
(b) Based on triggering pre-authorization conditions or merchant-side quotations, the AP2
framework generates a Cart Mandate.
(c) After two-way verification within the StakeStone system, the data is packaged into a stan-
dardized Payment Intent, which includes amount, recipient, execution conditions, contextual
data, and execution logic.
3. Execution & x402
(a) A Payment Intent can be executed either directly by an authorized StakeStone smart con-
tract or sent to an x402 facilitator for offchain or hybrid settlement.
(b) The x402 facilitator verifies the signatures and authorization, executes the payment settle-
ment (or forwards the transaction to onchain execution), and returns an HTTP 200 response
to confirm payment completion and service accessibility.
4. Compliance Feedback Loop
(a) Every payment automatically triggers onchain compliance verification through ZK-KYC /
AML RuleSets, ensuring audit visibility for all machine-to-machine transactions.
(b) Transaction and settlement states are synchronized in real time with StakeStone’s Risk
Control System and Regulatory Interfaces, achieving Compliance-as-Code through protocol-
level enforcement.
Through the combination of AP2 and x402, StakeStone’s machine accounts can not only perform
settlements within its own system but also interoperate with mainstream enterprise-grade payment
networks, achieving a Unified Flow between human and machine accounts.
2.4 Fee and Settlement Layer
2.4.1 Payment Abstraction: Multi-Asset Settlement and Fee Neutrality
While Gasless transactions address the user-side fee barrier, Payment Abstraction redefines how fees
are sourced and settled within the system.
Legacy blockchains restrict gas payments to native tokens (e.g., ETH), creating friction in cross-
chain and multi-asset ecosystems and forcing users and institutions to constantly perform token swaps
and top-ups, creating liquidity fragmentation and a discontinuous user experience.
In StakeStone’s Fee Layer, Payment Abstraction—built atop Account Abstraction and relayer
infrastructure—makes the fee source programmable. Any verified asset can act as gas, enabling a
unified multi-asset payment system under a single account.
Key Components:
• Multi-Asset Gas Payments: Users can pay network fees using stablecoins (USDC, DAI, CUSD)
or CBDCs, instead of being restricted to native tokens.
• Intelligent Exchange Routing: An embedded router uses oracle-based FX rates for real-time
conversions and accurate settlement.
• Sponsored Fee & Incentive Mechanisms: Institutions, protocols, or merchants can sponsor gas
fees, thereby supporting B2C and B2B incentive models.
• Cross-chain Account Interoperability: One account can execute payments and transfers across
multiple chains without switching mainnets or asset types.
This abstraction framework brings cross-chain neutrality and asset-agnostic settlement to StakeStone’s
neo-bank architecture, transforming transaction fees into a programmable parameter that adapts to
any asset, network, or participant.
9 2.4.2 Settlement Layer: Layered Settlement Architecture
The settlement layer of StakeStone’s Crypto-native Neo Bank is designed to support diverse capital
flow scenarios, including:
• Account transfers and balance management between user accounts;
• DeFi/yield product Exchange Rate updates;
• Cross-chain and multi-asset liquidity transfers;
• Automated micropayments between AI agents.
Unlike traditional banks, the asset structure of a crypto-native bank is multi-sourced and contains
complex liquidity routes. A single, uniform settlement logic cannot cover all asset types and transaction
models. StakeStone therefore implements a layered settlement model based on asset characteristics
and transaction scenarios.
2.4.3 Balance Settlement Layer
Handles transactions such as real-time transfers between accounts, payments, and settlements. De-
pending on transaction size, two blockchain settlement environments are required:
1. High-value, low-frequency transactions: settled directly on Ethereum L1.
2. Low-value, high-frequency transactions: processed in high-performance execution environments
(e.g. L2 rollups/appchains) to achieve:
(a) Real time usability for frequent payments, P2P payments, merchant settlements, and machine-
to-machine micropayments;
(b) Cost efficiency: reduced transaction costs through L2/app-chain gas efficiency, Gasless fee
abstraction, and batch processing mechanisms.
2.4.4 Yield and NAV Settlement Layer
Unlike the Balance Settlement Layer, this component of StakeStone’s Crypto-native Neo Bank focuses
on how yield-bearing tokens maintain accurate NAV updates on L2 or high-performance appchains.
To achieve this, the settlement of yield certificates adopts an L1–L2 / appchain dual-layer coordi-
nation model:
• L1 — Sole source of settlement and pricing
– The pricing of yield tokens are calculated and updated exclusively on Ethereum L1, serving
as the single authoritative source for price formation.
– For large-value transactions, users can directly invest or redeem yield-bearing tokens based
on native L1 pricing, with yield settlement completed on L1.
• L2 / Appchains — Retail distribution through swap
– Yield-bearing tokens bridged to L2/appchains are swapped by retail users via DEXs.
– The purchase and redemption prices of these tokens are determined either by DEX liquidity
or directly quoted by RFQ (Request for Quotation) providers.
– The low transaction costs and high execution efficiency of L2/appchains allow yield-bearing
tokens to reach a broader retail market, supporting smaller investors.
2.5 Compliance and Security Layer: Embedded Regulation and Transparancy
In StakeStone’s Crypto-native Neo Bank, the Compliance & Security Layer elevates onchain finance
from self-governing automation to a state of being regulatable, auditable, and verifiable.
By embedding compliance logic, risk controls, and audit modules directly into the protocol core,
this layer implements regulation by design—where oversight and innovation coexist at the technical
level.
Our goal is to establish a globally compliant yet transparently decentralized financial infrastructure,
maintaining both regulatory alignment and crypto-native self-sovereignty.
10 2.5.1 Onchain KYC/AML Module: Compliance Proof with Privacy
Traditional financial systems rely on manual processes or centralized databases for identity verification
and anti–money laundering monitoring. StakeStone replaces this model with an On-chain Compliance
Identity Layer that uses zero-knowledge proofs to enable privacy-preserving compliance verification.
• ZKP-based Identity Verification: Certified KYC providers validate user identity and risk profiles,
issuing a ZK Compliance Credential. When interacting on-chain, users only present a proof,
without revealing any plaintext personal information.
• Multi-level Compliance Mapping: Each account carries a dynamic compliance status indicator
(Compliant / Restricted / Pending), written directly into the account layer. This integrates
seamlessly with EIP-7702’s flexible authorization system, enabling transaction-level permission
control.
• Cross-chain / Cross-jurisdiction Interoperability: KYC/AML credentials can interoperate across
multiple networks through bridges and cryptographic signatures, allowing StakeStone to maintain
compliance across different countries and regulatory bodies.
This approach establishes a neo-bank version of “Know Your Wallet (KYW)”, ensuring that every
account possesses a verifiable compliance identity without compromising user privacy
2.5.2 Programmable Regulatory Interface: From Manual Reporting to Automated Com-
pliance Execution
StakeStone’s Crypto-native Neo Bank implements a Regulatory API Layer, enabling regulation com-
pliance to be embedded directly into the banking system as executable code, rather than relying on
reports or manual verification.
• API-level Regulatory Integration: Regulatory authorities or compliance nodes can define rules
via smart contract APIs, such as cross-border transfer limits, restricted address lists, and re-
porting intervals. Enabling the system to automatically validate compliance prior to transaction
execution, ensuring preemptive enforcement.
• Automated Compliance Data Reporting: Transaction and account data are encrypted and syn-
chr to designated regulatory endpoints, guaranteeing real-time availability and tamper-proof
compliance records.
• Compliance-as-Code: Regulatory logic is parameterized and upgradeable, forming an evolving
compliance framework where authorities from different jurisdictions can deploy their own rule
templates on a shared protocol foundation.
This mechanism transforms regulation from an external oversight function into an intrinsic system
capability—
Regulation becomes protocol; compliance becomes automatic.
3 Governance and Tokenomics
STO is the native governance and utility token of the StakeStone ecosystem. Its design leverages
the value-measurement function of token to involve and attract a global community to participate in
co-building an open, decentralized, and transparent crypto-native banking network.
In StakeStone’s banking framework, STO fulfills three core functions:
• Decentralized Governance: Locking STO generates veSTO, granting holders voting rights and
participation in protocol decisions.
• Enhanced Liquidity Stability : Users who lock veSTO and provide liquidity receive enhanced
yield multipliers.
• Value Accrual: The protocol captures revenue via STO burn mechanisms and redistributes value
by enhancing liquidity yields, protocol fee utility, and tokenholder alignment.
11 3.1 Governance Model: STO and veSTO conversion
Users engage in governance and earn rewards by converting STO tokens into veSTO.
• 1 STO = 1 veSTO upon conversion, effective immediately.
• When reverting from veSTO to STO, a mandatory lock-up period (e.g., 30 days) applies to
maintain governance stability.
3.2 veSTO Use Cases
• Governance: veSTO holders can vote on key protocol parameters such as fee ratios, token
emission schedules, and ecosystem reward allocations, as well as determine the overall direction
of protocol development.
• Deposit (Liquidity Provision) Incentives: Liquidity providers who lock veSTO receive a
yield boost on the liquidity they supply, increasing their overall returns within the Yield Layer.
• Fee Rebates: Depending on their veSTO holding tier, users are eligible for rebates on platform
fees, including transfer fees and on/off-ramp fees.
3.2.1 Swap and Burn
Through diversified sources of protocol revenue, StakeStone’s Crypto-native Neo Bank continuously
builds a Public Treasury made up of blue-chip crypto assets.
As the StakeStone ecosystem expands, the Treasury’s scale and composition will continue to grow
and diversify—forming the long-term value foundation for the STO token.
STO holders gain a value-backed swapping route through the Swap & Burn mecha-
nism:
Holders can exchange their STO tokens for a proportional share of the Treasury’s diversified assets.
Upon exchange, the STO is permanently burned, simultaneously reducing circulating supply and
strengthening its intrinsic value.
This mechanism creates a closed-loop value capture cycle for StakeStone’s governance token:
Protocol Growth → Treasury Expansion → Swap & Burn + STO Supply Reduction → Increased
Token Value.
4 Conclusion and Outlook
Traditional banking systems are built upon centralized trust and multi-layered intermediaries, result-
ing in high costs, inefficiency, imbalance, and an overall inability to adapt to the era of intelligent
automation.
Over the past decade, the rapid evolution of blockchain technology has prompted a fundamental
question: if the banks of the past had never existed, how would we rebuild them for the future using
today’s most advanced blockchain technologies?
StakeStone 2.0—our Crypto-native Neo Bank—was designed as a systematic answer to that ques-
tion, reimagining the foundations of banking for the decentralized, machine-integrated economy of
tomorrow.
4.1 Addressing High Costs: From ”Human Trust” to ”Code Trust”
The high operating costs of traditional banks stem from their dependence on manual processes, com-
pliance overhead, IT infrastructure, physical branches, and multi-layered settlement structures.
StakeStone 2.0 replaces these inefficiencies with Account Abstraction (EIP-7702), Gasless
transactions, and Social Login, enabling self-custodied accounts with automated trust through
smart contracts and zero-friction onboarding.
• Account-as-the-Bank: Users hold their own onchain accounts—funds no longer require third-
party custody.
12 • Gasless Transactions: Fees are abstracted away, creating a Web2-level user experience.
• Smart Account Logic: Multi-signature, spending limits, automated yield management, and
risk controls are all executed by code instead of manual approval.
For the first time, the cost of trust in banking transforms from human to computational, turning users
from recipients of service into autonomous financial actors.
4.2 Addressing Inefficiency: From ”Batch Settlement” to ”Real-time Set-
tlement”
Traditional banks rely on multi-tiered clearing processes and manual reconciliation for interbank and
cross-border transactions, making T+N settlements the norm. These legacy systems depend on end-
of-day batch processing, which introduces latency and operational friction.
StakeStone 2.0 replaces this with a layered settlement architecture that defines differentiated
settlement logic based on asset type and transaction scenario. In this model, each transaction achieves
settlement instantaneously, and each settlement equals final confirmation, achieving true real-time
settlement.
As a result, cross-border payments, peer-to-peer transfers, and machine-to-machine micropayments
can now be executed with near-zero latency, redefining financial efficiency for the onchain era.
4.3 Addresing Inequality of Opportunity: From ”Closed Access” to ”Open
Inclusion”
Traditional banks divide the world into those who are served and those who are excluded, constrained
by account requirements, regional barriers, and capital thresholds.
StakeStone 2.0, through our onchain Yield Layer, enables anyone to participate in the global yield
network with minimal entry barriers. Because the marginal cost of providing global financial services
through code is near zero, the Crypto-native Neo Bank model makes universal financial inclusion
possible for the first time.
Regardless of geography or economic condition, every individual and institution can now participate
equally within the same yield ecosystem, accessing opportunities once limited to a privileged few.
4.4 Addressing Data Silos and AI Incompatibility: From ”Human Deci-
sion” to ”Intelligent Collaboration”
Traditional banking architectures are closed, fragmented, and lack real-time processing or open inter-
faces, making them ill-equipped to support emerging financial scenarios such as AI-driven autonomous
decision-making and machine-to-machine (M2M) settlement.
Legacy operational logic still assumes that “customers occasionally perform transactions” rather
than “intelligent agents continuously interact and transact,” leaving them fundamentally misaligned
with the machine economy.
StakeStone bridges this gap through the integration of AP2 (Agents-to-Payments Protocol) and
x402, building an AI & Machine Payment Layer that enables every AI, IoT device, or algorithm to
possess an independent identity and programmable payment capability.
• AP2 defines payment intent: AI agents automatically generate Payment Intents based on
task objectives and resource requirements.
• x402 provides authorization and secure settlement: Built on the HTTP 402 status code,
x402 offers a standardized payment authorization and validation channel. It receives and verifies
Payment Requests from AP2, then executes onchain settlements or calls Custody APIs for fund
transfers through designated facilitators.
• Gasless + Compliance Module: Relay services sponsor transaction fees, enabling fully au-
tomated and auditable agent transactions with integrated regulatory traceability.
13 AP2 manages payment intent and authorization logic, while x402 oversees verification and settlement.
Together, they embed autonomous intelligence into StakeStone accounts, enabling them to make in-
dependent decisions and execute transactions, where AI and human accounts collaborate seamlessly
within the same financial stack, fully aligning with the machine economy.
4.5 Addressing Regulatory Complexity and Opacity: From ”Manual Re-
porting” to ”Compliance-as-Code”
StakeStone 2.0’s Compliance & Security Layer embeds regulatory logic directly into the protocol
layer through its ZK-KYC/AML module and Programmable Regulatory API Layer, ensuring
that compliance and innovation coexist without conflict.
• Zero-Knowledge Compliance: Identity legitimacy is verified without exposing private infor-
mation.
• Embedded Regulatory APIs: Compliance rules are executed directly as code, automatically
intercepting non-compliant transactions.
• Cross-Jurisdiction Recognition: Encrypted credentials and transaction records are portable
across networks, enabling multi-national regulatory interoperability.
Compliance is no longer an external burden but a native attribute of the system itself. StakeStone
makes “Regulation as Protocol, Compliance as Execution” an onchain reality.
4.6 Toward the Bank of the Future: A Public Network for Global Value
Flow
What StakeStone is building is not a traditional financial intermediary dependent on manual processes
and centralized systems, but a new kind of Crypto-native Neo Bank — a financial infras-
tructure rooted in blockchain-based trust, powered by intelligent accounts, and defined by
machine-to-machine interoperability.
When human and machine accounts share the same economic stack and when yield, settlement,
clearing, and governance all take place on a single open ledger, the bank is no longer merely a human-
centered service institution — it evolves into a public network for global value flow.
StakeStone’s Vision To make finance as open as the Internet,And let value flow as freely as
information.This, is StakeStone’s answer to the future of banking.
5 Appendix
5.1 R Value Calculation Formula for STONEUSD / STONEBTC
To ensure transparency and consistency in yield distribution, NAV calculation, and locking cycles, the
StakeStone Crypto-native Neo Bank adopts the formula shown in Image 3 to calculate the R Value
(Exchange Rate Ratio), which measures the periodic NAV change of yield-bearing tokens such as
STONEUSD and STONEBTC:
R =
user deposit − user withdraw + user profit − lp locked value
lp amount − lp locked (1)
Parameter: user deposit
Definition: The user’s total cumulative deposit amount (gross inflow), retrieved in real time from
onchain contract data.
Parameter: user withdraw
Definition: The user’s total cumulative withdrawal amount (gross outflow), retrieved in real time
from onchain contract data.
Parameter: user profit
14 Definition: The user’s accrued yield, calculated by the system based on the results of strategy
execution (including PnL, fees, and revenue sharing) and allocated to the user’s account.
Parameter: lp amount
Definition: The total issued supply of STONEUSD (or other yield-bearing tokens), representing
the total number of circulating yield tokens currently in the system.
Parameter: lp locked Definition: The amount of STONEUSD in a locked state during the
settlement process. Every Thursday (UTC), when user withdrawal requests are processed, the corre-
sponding tokens are marked as locked.
Parameter: lp locked value Definition: The value within the locked pool, calculated as
lp locked × R (NAV at the time of locking). This value records the conversion ratio between STONEUSD
and stablecoin for the given cycle. The system updates this figure every Thursday (UTC) and displays
the current exchange rate on the frontend.
5.1.1 Parameter Definition and Framework
• The R Value reflects the periodic NAV fluctuation of yield-bearing tokens and serves as the
core variable for yield distribution and redemption settlement.
• The calculation logic is executed automatically each settlement cycle (typically once per week),
ensuring that all user assets are settled accurately based on the latest exchange rate.
• If a locking operation occurs during a cycle, the corresponding tokens and values are temporarily
excluded from the denominator to prevent short-term liquidity fluctuations from distorting NAV.
• All parameters are sourced from onchain verifiable data, ensuring that the entire computation
process remains transparent, auditable, and tamper-proof.
5.1.2 Snapshot and NAV Update Mechanism
StakeStone performs its Snapshot & Settlement Cycle automatically every Thursday at 00:00 UTC,
following this process:
1. Aggregate all user deposit, withdrawal, and yield records for the current cycle;
2. Compute the new R Value;
3. Update the Exchange Rate for yield-bearing tokens such as STONEUSD and STONEBTC;
4. Publish an onchain snapshot and synchronize the results to the user interface.
This mechanism ensures fair yield distribution, transparent NAV confirmation, and cross-layer data
consistency within each cycle, while also providing a unified NAV reference across the custody, settle-
ment, and contract layers.
5.2 Swap and Burn
The Swap & Burn mechanism is one of the core components of the StakeStone protocol, designed
to achieve STO value capture and market equilibrium.
By allowing users to exchange STO tokens for diversified assets held in the Treasury while burning
a proportional amount of STO during each swap, the system establishes a self-regulating value model
that provides both intrinsic backing and a market floor for the token.
5.2.1 Operational Mechanism
Holding STO tokens represents a potential claim on a proportional share of the Treasury’s assets. As
the protocol grows and accumulates revenue, the Treasury expands with additional blue-chip crypto
assets.
When the implied asset value per STO in the Treasury exceeds the market price of STO, an
arbitrage opportunity arises. Users can then restore market equilibrium through the following process:
15 1. Buy STO on the open market: When the STO market price falls below its implied Treasury
value, users can purchase STO at a discount in secondary markets.
2. Execute Swap & Burn: Users submit their STO to the protocol for a swap. The system
calculates their share of Treasury assets (e.g., ETH, BTC, or stablecoins) based on the Treasury’s
NAV, and permanently burns the corresponding amount of STO after the swap.
3. Realize profit and value convergence: Users receive Treasury assets, while the STO supply
decreases, driving the token’s market price back toward its intrinsic value range.
5.2.2 Economic and Market Impact
Within StakeStone’s tokenomics, the Swap & Burn mechanism performs three key functions:
• Deflationary Pressure: Each treasury swap permanently burns STO, reducing total supply
and introducing a built-in deflationary effect.
• Value Realization: Users can convert STO into Treasury assets, creating a verifiable asset-
backed intrinsic value for STO.
• Soft Value Floor: The arbitrage process establishes a natural price floor, as market participants
continuously rebalance STO’s price relative to Treasury NAV.
5.2.3 Self-Regulation and Sustainability
The Swap & Burn design ensures that arbitrage activity not only benefits participants but also stabilizes
STO price. Its key characteristics include:
• Price Discovery: Market behavior dynamically corrects token valuation, keeping STO prices
anchored near Treasury NAV.
• Organic Equilibrium: Swap activity maintains a dynamic balance between Treasury growth
and STO circulation.
• Sustainable Value Support: As the Treasury continues to accumulate assets, STO’s intrinsic
value and scarcity strengthen in tandem, reinforcing STO’s long-term stability.#ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges #BitmineIncreasesETHStake $STO

Let's go into two things. things I want to kind of start off here with first is this news which was breaking just a few minutes ago. Uh the Iranian president basically says, "Hey, Iran is ready to end this war. Uh we need we do want guarantees." There hasn't been a list of these guarantees just yet, but the US stock market and the crypto market started to react. If you look at the charts quickly, you can see Bitcoin is up almost 2% after two days on Greek candles right now. if it closes out on that. If you take a look at Ethereum right now, we'll take a look almost 5% up as well on two days.

So, is the market starting to respond or is this a position that will start to see retracement in these markets based on the other macro events? And I'll break down all those things because this starts to play into a much more long game here around how does the macro affect the long-term market. Many people will say, "Well, hey, listen. If we get out of this war, the sentiment alone will start to address this." I want to show you case a little thing that's going to affect sentiment, and that of course is going to be gas prices hitting $4 for the first time since August of 2022.
That's a big deal. But at the same time, you've got a potential out here. Here's Bellagi uh talking about this. If you look at it from the MAGA perspective, Trump could declare victory. He moves on. US won't waste any more people or treasure in the Middle East. Trump can say he's fully, you know, he's fulfilled everything from his campaign promises, which was stop Iran from getting a nuke and no more long endless Middle Eastern wars. That's good because it would be, you know, a long endless one. At least we're out. The other thing that plays into this is from the Iranian side, it's, you know, this from a long-suffering Iranian people's perspective, ending the war would now save countless lives.

I think that's another big advantage because any type of an escalation is only going to get worse for both sides and I think that's the thing that we've got to stay away from. Uh the last one is US could declare victory and go home. Substantial diplomatic pressure though would be applied to Iran at that time based on getting the straight of Hormuz open and getting ships. This would put everything back into the EU and many of the countries that really rely on that straight. So last thing, of course, America shouldn't have to spend a single more scent, a single more soldier all in the Middle East. This can be resolved. This might be the offramp. And you've got the president of Iran queuing in that maybe there's a deal here to be made. So maybe in the next couple of days, we could see something. All right.
One thing you got to consider is the Iranian position right now within the straight of Hormuz. Uh because they've built kind of a toll booth scenario that plays into this. If it stays in that capacity, this is the continuation of that because this is going to be a longer more macroaffected market. 20% of global oil flow stay disrupted. Energy is a problem and then inflation doesn't cool. It actually reacelerates. The other thing that doesn't stop is some of the key things that also flow through there, which is fertilizer, LG, liquid gas, food all get pulled into these supply chains and I agree they would tighten and growth slows. Again, this puts more pressure on all countries including the United States.

Other things that you have to kind of consider right now is pressure on actual companies inside the US. And when I say inside the US, companies that reside in the US, but are in the Middle East. The RCG is now threatening Tesla, Microsoft, Google, Apple, Intel, IBM, and Boeing. This, I think, gets the attention of President Trump because he is all about the market. When you look further into Trump's stock market, uh this is 43, but really flip that and go to almost 60% of the S&P 500 are trading below their 200 day moving average. That would be the worst market breath since May. And I think this is another factor that starts to put a lot of pressure on the Trump administration to get this done. Again, the S&P tracking for its eighth consecutive close below the 200 day moving average.
Longest streak we've seen since April and May of 25. You guys remember that was of course all about tariffs. I want to go to a clip real quick because this will get into a little bit more on whether or not we've got demand destruction and how long it's going to stay. Take a look. >> So, I do think we're going from a price shock to a price shock and a demand shock. And that's the economic logic of all these tipping points that are being triggered in the war. I must say I'm I'm I'm more worried than the average. I'm more worried than the average because of the dynamics of the war. It's an asymmetrical war. You have three parties now. Four parties, all of whom believe they're winning, >> which makes it very hard to end this war. And the US is the only one that can declare victory but can't impose outcomes.
And I also look at the economy and I'm starting to see demand destruction in general. You know, I've gone from reduced risk to maximum risk off to now a few names look attractive but I would not be going into the market and buying the index at this juncture if this continues. So you start with energy shock, interest rate shock, broader inflation shock, demand shock. Then if this continues, which I hope it won't, we're going to be talking about financial instability. So that's the sequence. Hopefully we don't we don't go all the way down, but that's the sequence that's been triggered. What he's talking about there is really like a rolling blackout uh around the markets in general. It isn't necessarily showing up in some of the data, but it is starting to peak through in other parts of it. And what I mean by that, consumer confidence came in higher than expected right now at 91.8 versus 87.8. 8. That was surprising to me cuz I feel like consumer confidence. Let me know what you guys think. Are you confident right now in the way the market is? Drop some comments down below.

The Jolts job openings came in at 6.8 million versus 7.24 last month. So that means less jobs available. That's a clear decline in a demand for workers. That's the concern I have is when you have jobs and you have inflation brewing, you have a dual hit on the mandate that the Fed tries to put out. And that is a concern because it will start to get into the interest rate side of things. Here's the Fed talking about their outlook around the energy crisis. Take a look. >> Look what what I keep hearing from Fed officials is this idea of kind of scenario analysis, which may be a fancy way of saying we don't really know what to think. But another way of saying we're looking at different options.
And most of this particular option or outlook that uh Williams gave us was this idea that uh he expects the energy price uh uh to work through the system and not to have a long run effect if and when hostilities cease based on the idea that policy takes a long time to hit the economy but the energy price can be short. So you may end up adjusting something that doesn't ultimately need adjusting.
That's an interesting take uh for them not to see this in a long and I would I would agree with that if if this ends energy shock may slow uh the real question I think is going to be some of these carry on industries that are being affected right now from food uh to what we're seeing around gas supply etc. Some of that may play into the benefit of the United States but I think still this is going to have effect long term on the economy. Now, David Rosenberg talked a little bit more about this uh of whether or not the Fed hike would raise recession risk parameters. Take a look. >> You'd have to tell me what is the appropriate Fed funds rate to deal with a supply shock this big. It it'd be huge. So, the last thing we need to do is layer an interest rate shock uh on top of the war shock and all the other shocks the economy is is still facing.
you know, uh we're not quite at the level we were in in 2022, but the speed of the increase >> is a lot more acute. Uh so this inflation shock, food and fuels in particular, which are things that people can't substitute away from, uh that is going to hit the wall in the labor market. And what we're going to end up with, and you're going to see this in real time within the next few months, is a contraction in real incomes and then a contraction in real consumer spending. >> Okay? >> You know, why raise rates when uh the demand destruction in the other parts of the economy are actually are actually going to be going to be deflationary.
>> All right. So, he might be on to something here. Why raise rates if we're moving into this direction? And if he is right around the demand destruction and also what we would be looking at which is kind of the effects of these markets hitting jobs uh consumer demand those kind of things all centered around energy. I guess the real question is how long is this sustained energy going to hold? If you look back at the crude uh comparison with crude oil west Texas I'm going back to 2021. That was kind of uh when we had the last shock like this. That was from the end of November to that high right there. It wasn't to the peak, but right there to that quick high on the shock, which was February. So, it was about a three-month run. We're almost in that same range right here, end of December to where we hear on end of March also.
Now granted, it's not the what was that almost $115 uh dollars a barrel at that time, but the point is is that the acceleration to his point is there and that does create a longer hit on economic conditions when you have something that accelerates so quickly because the market doesn't have time to react to it. But of course, we would see uh you know, sentiment change. Obviously, if we see the US step out of this, that most likely will have some effect. I don't know if it would be a long-term effect. I still feel like there's going to be some macro uh residual that's going to uh really roll into this. And things that you have to consider is when there are slow markets moving like that.
Gold usually is one of the bigger hits. Here of course is a good example of that. First time in 30 years central banks now holding more than more gold than US treasuries. Uh and if you understand that, you understand what we're talking about here. Does this mean though that we continue to see maybe a rotation out of gold? That's a possibility pending on the sentiment that could play if Trump gets an exit channel out of this war. All of that again gets into the longer effect on the market because this is the concern I have when people see these markets immediately take a spin up.
Are they ready for what we could still see in these lagging macro effects in the market overall? So very unusual and and listen, they're still trying to pay for this thing. GOP is now eyeing ACA subsidies to try to pay for this. Uh this would be, I think, terrible. This is bad for the uh for Americans, but more importantly, they're getting into other areas of programs right now to try to deal with this. Here's a clip that kind of breaks that down. >> We have a war on a nuclear Iran that could be paid for by the president's war on fraud. And as you said, there's a boatload of fraud across the federal government. We just addressed Medicaid and SNAP, but there are 70 plus meansested welfare programs across this entire people's government and about $1.5 trillion cost. You mentioned the GAO reports. This just makes too much sense, Larry.
I agree with you 100%. I'm not necessarily agreeing with that, but uh we are in a pinch because this does cost a ton to be able to sustain this long term. Granted, if it stops now, you get out of that immediately. Hopefully that corrects some of the economy, but definitely not, I think, enough to really deal with these expenditures that are are going to be very difficult to replace immediately. Where this does have an effect, I think, is on Trump's administration. The midterm elections now is starting to sway into the Democrats taking both the House and the Senate. So, this would be significant for a lame duck presidency that of course Trump would be susceptible to if this holds through midterms later this fall. This is where it gets very interesting because that's where it starts to affect how legislation can be done. This could play into a lot of different industries. This is going to be a little bit of a problem I think coming a little bit later in the year. So stay tuned. We're going to cover more.#ADPJobsSurge #GoogleStudyOnCryptoSecurityChallenges #BitmineIncreasesETHStake $BTC
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