Binance Labs Invests in Zest Protocol, Aims to Provide On-Chain Bitcoin Lending

• Blockchain Council
• September 02, 2024

Zest Protocol recently celebrated a significant milestone, having secured a substantial $3.5 million in seed funding. This achievement underscores the growing interest and investment in the realm of Bitcoin lending.

https://twitter.com/ZestProtocol/status/1790015192904212549

The funding round, spearheaded by prominent investor Tim Draper, saw participation from key players in the cryptocurrency space, including Binance Labs, Flow Traders, Trust Machines, and others. This diverse group of investors reflects the widespread recognition of Zest Protocol’s potential to reshape the landscape of Bitcoin lending.

So, what sets the Zest Protocol apart? At its core, the platform is dedicated to providing Bitcoin holders with opportunities to generate yield from their assets through on-chain lending. By harnessing the power of Blockchain technology, Zest Protocol aims to offer a seamless and transparent lending experience native to the Bitcoin network.

Central to Zest Protocol’s operational mechanics is its utilization of the Nakamoto upgrade by Bitcoin layer 2 solution, Stacks. This upgrade enables the platform to introduce a bridging asset known as sBTC, which maintains a 1:1 peg to Bitcoin. Through this innovative approach, users can seamlessly deposit their Bitcoin into Zest Protocol, where it is converted into sBTC and integrated into the platform’s pool contracts.

What’s noteworthy is Zest Protocol’s commitment to maintaining the non-custodial nature of users’ assets throughout the lending process. When users wish to withdraw their funds, Zest Protocol automates the conversion of sBTC back to Bitcoin, ensuring that users retain full control over their assets.

A key aspect of Zest Protocol’s offering is its use of Clarity smart contracts on the Stacks platform. These contracts enable direct interaction with Bitcoin’s Blockchain, enhancing security and efficiency in the lending process.

In addition to enabling lending, Zest Protocol also introduces a borrowing feature, allowing users to access liquidity against their Bitcoin holdings. This feature, reminiscent of popular DeFi platforms, is tailored to operate within the Bitcoin ecosystem via the Stacks Layer 2 solution.

Looking ahead, Zest Protocol’s vision extends beyond providing a lending platform. Founder Tycho Onnasch emphasizes the importance of Bitcoin Layer 2 solutions in unlocking the potential of Bitcoin in decentralized finance. By leveraging innovations like Stacks, Zest Protocol aims to pave the way for the widespread adoption of Bitcoin lending in the decentralized finance sector.

Binance Labs’ investment in Zest Protocol further validates the platform’s potential to redefine Bitcoin lending. As the venture capital arm of Binance, Binance Labs is renowned for identifying groundbreaking projects that shape the industry. With their support, Zest Protocol is well-positioned to drive innovation and growth in the Bitcoin lending space.

Zest Protocol’s successful seed funding round and strategic investment from Binance Labs signal a new chapter in the evolution of Bitcoin lending. By offering a transparent, on-chain lending experience, Zest Protocol aims to empower Bitcoin holders and borrowers alike, unlocking the full potential of Bitcoin in the decentralized finance landscape.