Zest Protocol - Bitcoin Lending Protocol with participation from Binance Labs

Zest Protocol, a Bitcoin lending protocol, has secured $3.5 million in funding, spearheaded by Draper Associates and supported by Binance Labs and Flow Traders. But what does Zest Protocol entail? Let's explore further in the following discussion!

1. What is Zest Protocol?

Zest Protocol is an open-source on-chain Bitcoin lending protocol.

2. Zest Protocol's Solutions

Zest Protocol offers an on-chain BTC lending market based on secure smart contracts powered by the Bitcoin blockchain. This solution minimizes counterparty risks by holding capital and transparently issuing loans on-chain. Instead of relying on opaque and unaudited balance sheets, Zest Protocol employs smart contracts to manage centralized funds. Anyone can check the funds and the open-source smart contract code controlling fund movements at any time.

Zest Protocol features two types of pools:

Earn Pools: Where users can earn profits from their BTC.

Borrow Pools: Where users can borrow money by collateralizing BTC.

With Zest Protocol, transactions and lending activities become transparent and secure due to the blockchain's public and verifiable nature.

2.1. Overview of Zest Protocol Borrow

Zest Protocol Borrow enables users to receive liquidity against Bitcoin by borrowing. It is written in Clarity on Stacks L2 and is based on the design of Aave v3.

Currently, there are three types of wallets supporting Zest Protocol:

The true potential of Zest Protocol Borrow will be realized after the hard fork of sBTC is merged into Stacks L2 in mid-2024. Prior to that, the project will deploy the Stacks lending market using Zest Protocol Borrow's Clarity smart contracts. This allows the project to attract real TVL to prepare for the influx of BTC capital after the sBTC upgrade.

The two activities users can engage in are Supply and Borrow. The assets used as collateral on the protocol are stSTX and two types of assets that can be Supplied are aeUSDC and STX, with APYs of 52.99% and 3.94%, respectively.

To Borrow on this platform, you need to Supply stSTX. The APY when Borrowing aeUSDC and STX are 58.88% and 4.38%, respectively.

Currently, Zest Protocol has introduced a point system to incentivize user participation. Users earn 1 point for every $1 supplied on the protocol daily. When referring users, you can also earn 10% of the points they earn.

2.2. Overview of Zest Protocol Earn

Zest Protocol allows liquidity providers to generate Bitcoin profits through professionally managed lending pools for blue-chip crypto borrowers. Each lending pool provides capital to multiple borrowers, offering BTC liquidity providers diversified exposure.

How to start earning BTC?

To participate in Bitcoin yield pools on Zest Protocol, users need to have Stacks and a Bitcoin address. To start earning BTC yield, LPs need to follow these steps:

Step 1: Select a pool.

Step 2: Deposit native BTC.

After depositing, users will have LP tokens in their Stacks wallet representing the BTC they have added to the Zest pool.

Zest Protocol requires liquidity providers to have both a Bitcoin address and Stacks. Currently, XVerse and Hiro wallets are two types of application wallets that provide both Bitcoin and Stacks addresses.

Users can also choose to use separate Bitcoin and Stacks wallets, such as if they want to use an exchange or custodian to send BTC to a pool on Zest Protocol.

The Hiro wallet supports Ledger and is currently integrating with custodians to facilitate institutional investor access. Additionally, Zest Protocol also supports multi-signature signing for LPs.

Above is the documentation for Zest Protocol Earn, and this product will soon be launched in the near future.

3. Tokenomics


4. Team

Zest Protocol was established by Tycho Onnasch, who previously held positions at various organizations including Stacks, the Bitcoin Frontier Fund, Trust Machines, Deedmob, and the Regulatory Body of the Oxford Union Association.

5. Investors

Zest Protocol successfully secured $3.5 million in seed funding, spearheaded by Draper Associates, alongside contributions from Binance Labs, Flow Traders Trust Machine, and various other investment entities.

Draper Associates, established in 1985 by Tim Draper, operates as a venture capital firm specializing in early-stage investments.

Tim Draper is a prominent figure in Silicon Valley's venture capital scene, known for his investments in iconic companies like SpaceX, Tesla, and Coinbase.

He is a fervent advocate for Bitcoin and boasts one of the largest cryptocurrency portfolios globally.

6. Roadmap

At present, Zest Protocol holds a prominent position within the Stacks lending markets. Moving forward, the project's primary focus will revolve around enhancing its Earn and Borrow BTC functionalities.

Previously, Zest Protocol successfully accomplished three significant milestones: undergoing an audit in Q4 2023, deploying a prototype in Q1 and Q2 2023, and emphasizing its integration with the Stacks ecosystem from 2021 to 2022.

7. Project infomation

8. Conclusion

The foregoing is an article about Zest Protocol, focusing on its role as a Bitcoin lending protocol. We trust that you have found the information provided to be helpful. Should you have any inquiries or require further elucidation, please feel free to post your questions in the BigcoinVietnam group for assistance.



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