Zest Raises $3.5 Million for Bitcoin Lending Innovation

Zest, a pioneering bitcoin lending protocol, has secured $3.5 million in funding to empower bitcoin (BTC) holders to leverage their assets on-chain and generate yields, announced the company via email on Monday. The seed funding round was spearheaded by billionaire investor Tim Draper, with notable participation from Binance Labs, Flow Traders, Trust Machines, and other investors.

Zest Protocol leverages the Nakamoto upgrade by Bitcoin layer 2 Stacks and bridges asset sBTC, pegged 1:1 to bitcoin, to introduce a lending experience seamlessly integrated into the world’s largest blockchain network.

Native Blockchain Integration

Users will utilize sBTC to transfer bitcoin to their balance on Zest Protocol, hosted on the Stacks mainnet, enabling them to participate in lending and other yield-generating activities.

Tycho Onnasch, founder of Zest Protocol, emphasized the pivotal role of Bitcoin layer 2 solutions like Stacks in facilitating Bitcoin DeFi. He highlighted the limitations on Ethereum, where basic DeFi primitives like liquidity pools are unattainable on Bitcoin L1. Here’s what he said, “Bitcoin L2s like Stacks are set to play a key role in unlocking Bitcoin DeFi. Unlike on Ethereum, the creation of basic DeFi primitives such as liquidity pools isn’t possible on Bitcoin L1. The Stacks sBTC upgrade is set to be a watershed moment for Bitcoin DeFi, which is what it was designed for from the beginning.”