Crypto Gloss

StakeDAO

StakeDAO operates in the same conceptual space as Convex Finance — it is an aggregator that makes locked governance tokens liquid and monetizes their voting power through bribe markets — but while Convex built an earlier and deeper integration with Curve specifically (becoming the single largest veCRV holder), StakeDAO took a multi-protocol approach, building liquid lockers for CRV, CVX, BAL, Angle Protocol’s ANGLE token, and others, positioning itself as a generalized governance aggregation layer rather than a Curve-specific play. The core insight is the same: many DeFi protocols (Curve, Balancer, Frax) use gauge-weighted voting systems where locked token holders direct liquidity mining emissions to specific pools — and protocols needing those emissions are willing to pay bribes to lock holders who vote for their pools. StakeDAO aggregates individual users’ tokens, locks them on their behalf, earns the gauge voting power, and sells that voting power through bribe markets while giving users liquid receipt tokens (sdCRV, sdCVX, sdBAL) they can trade, use as collateral, or farm.

Key Facts

  • Founded: 2020, launched liquid locker products 2021–2022
  • Governance token: SDT (StakeDAO Token)
  • Staked governance token: veSDT (vote-escrowed SDT)
  • Primary products: Liquid lockers (sdCRV, sdCVX, sdBAL, sdANGLE), voting bribe marketplace, strategy vaults
  • Liquid locker receipt tokens: sdCRV, sdCVX, sdBAL, sdANGLE
  • Competitor to: Convex Finance (CRV), Votium (bribe aggregation), Aura Finance (BAL)

Core Products

The main product offerings are described below.

1. Liquid Lockers

The flagship product. StakeDAO’s liquid lockers let users deposit governance tokens and receive liquid representations:

sdCRV (liquid CRV locker):

  • User deposits CRV → StakeDAO locks CRV as veCRV at the contract level → user receives sdCRV
  • sdCRV earns: Curve trading fees (distributed to veCRV holders), 3CRV rewards, CRV inflation (distributed pro-rata), and StakeDAO’s share of Curve bribes
  • sdCRV is liquid — user can trade it on Curve’s sdCRV/CRV pool anytime (vs. veCRV which is locked for up to 4 years with no exit)
  • The sdCRV:CRV exchange rate fluctuates based on demand — sdCRV typically trades at a slight discount to CRV due to the loss of lock flexibility

sdCVX (liquid CVX locker):

  • CVX is Convex Finance’s token — Convex is itself already an aggregation layer on Curve
  • StakeDAO adds a second layer: lock CVX → get sdCVX → retain CVX yield (Convex platform fees) + participate in Convex voting (which directs Convex’s massive veCRV position)
  • Note: This creates a three-layer abstraction: StakeDAO → Convex → Curve

sdBAL (liquid BAL locker):

  • Balancer Finance uses a similar gauge system (veBAL, 80/20 BAL/ETH LP token locked)
  • StakeDAO’s sdBAL locker deposits into Balancer’s veBAL and issues liquid receipts
  • Competes with Aura Finance (which does the same thing for BAL)

How liquid lockers make money:

  • StakeDAO takes a protocol fee (typically 10-15%) on the yield earned by the locked tokens
  • The rest goes to sdToken holders
  • SDT holders (staked as veSDT) receive a share of those protocol fees across all lockers

2. Bribe Marketplace

StakeDAO operates a bribe marketplace where external protocols can pay SDT, sdCRV, or ETH to sdToken holders who direct their governance votes toward specific liquidity pools.

Workflow:

  1. Protocol X (e.g., Frax Finance) wants Curve gauge emissions directed to fraxUSDC pool
  2. Protocol X posts a bribe: 50,000 FRAX for sdCRV holders who vote fraxUSDC
  3. StakeDAO’s voting snapshot captures sdCRV vote-weight
  4. sdCRV holders who voted or delegated to the correct gauge receive FRAX proportional to their sdCRV balance

Competition: Votium (Convex-specific bribe aggregator) is the incumbent for vlCVX bribes on Curve. StakeDAO’s own bribe market covers its own voting power from the sdCRV and sdCVX lockers separately.

Revenue: Bribe income is additional yield on top of the base staking yield — it’s compensation for governance participation.

3. Strategy Vaults

Like Yearn Finance or Convex-style autocompounders, StakeDAO operates yield strategy vaults:

  • Curve strategy vaults: Users deposit LP tokens from Curve pools; StakeDAO autocompounds CRV and CVX rewards back into the LP position
  • Convex strategy vaults: Similar vaults using Convex’s boosted Curve rewards
  • Custom fixed-income strategies: Later introduced fixed-rate yield products on top of Pendle Finance and other structured yield protocols

SDT Token Economics

Token design and economics are covered in detail below.

Distribution and Utility

  • veSDT: SDT locked for 4 years = maximum veSDT; shorter locks = less veSDT
  • veSDT utility:
  1. Governance over StakeDAO protocol parameters (fees, new locker launches)
  2. Yield boost on StakeDAO strategy vaults (similar to veCRV boost on Curve)
  3. Revenue share from all liquid locker protocol fees

SDT emission schedule: SDT inflates at a declining rate; emitted to strategy vault depositors and veSDT stakers to incentivize participation

Flywheel Logic

The intended flywheel:

  1. More sdCRV/sdBAL locked → more voting power aggregated → better bribe income
  2. Better bribe income → higher sdToken yields → more users lock SDT as veSDT to capture fee share
  3. Higher SDT price → more attractive to SDT-denominated bribe offers

Multi-Protocol “All-Weather” Positioning

Unlike Convex, which is essentially a Curve-specific protocol (its value is almost entirely derived from Curve’s gauge system), StakeDAO has positioned itself as a multi-protocol aggregator:

Protocol StakeDAO liquid locker Incumbent competitor
Curve sdCRV (Convex has veCRV but no liquid locker product)
Convex sdCVX Votium (bribe aggregation)
Balancer sdBAL Aura Finance
Angle sdANGLE (no major competitor)
Pendle — Penpie, Equilibria Finance

This multi-protocol positioning reduces StakeDAO’s exposure to any single protocol’s decline — if Curve governance emissions become less valuable (happened post-2022 bear market), StakeDAO’s Balancer and other vaults partially compensate.

Market Position and Challenges

Peak position (2022 Curve Wars era): StakeDAO was one of the most prominent participants in the Curve Wars, accumulating significant veCRV and sdCRV AUM alongside Convex. At peak, StakeDAO held ~1-2% of total veCRV supply (vs. Convex at ~40-50%).

Bear market challenges:

  • Curve Wars cooled significantly as CRV price dropped ~90% from peak
  • Lower CRV price → lower bribe income in USD terms → less attractive sdCRV yield → reduced TVL
  • StakeDAO TVL dropped from ~$200M peak to <$50M in bear market

Survivability: Unlike some bear-market casualties, StakeDAO survived and continued operating because its revenue model is fee-based (not purely inflationary SDT emissions) and the liquid locker model remains useful even in lower-value environments.

Related Terms

Sources

  1. “The Curve Wars: Governance Aggregation Dynamics and veCRV Concentration Across Convex, StakeDAO, and Frax” — Delphi Digital (2022).
  1. “sdCRV vs. veCRV: Liquidity Premium and 4-Year Lock Opportunity Cost Analysis” — Gauntlet Network Risk Report (2022).
  1. “Multi-Protocol Liquid Locker Comparison: StakeDAO sdBAL vs Aura Finance auBAL — Market Share and Yield Analysis” — Balancer Labs Research (2022).
  1. “SDT Token Value Accrual: When Does veSDT Revenue Sharing Make SDT Economically Attractive?” — Token Terminal Research (2023).
  1. “Yield Optimization Layer Wars: How StakeDAO, Convex, Aura, and Penpie Fragment-and-Capture DeFi’s Underlying Protocol Revenue” — Blockworks Research (2023).