Zest brings non-custodial borrowing and lending to Bitcoin, powered by sBTC
Zest makes Bitcoin lending and borrowing possible via sBTC, a 1:1 Bitcoin-backed asset on the Stacks network.
The protocol is straightforward.
Deposit Stacks assets in the Zest Protocol.
Earn passive yield or borrow against your deposited assets.
The Zest Protocol is currently focused on Stacks assets and is paving the way to unlock the power of sBTC, which will be rolling out soon.
The Bitcoin Economy Needs Robust Capital Markets
If Bitcoiners want liquidity but don’t want to sell their Bitcoin, they’re in a challenging position. Current solutions require trusting a centralized platform or custodian to borrow against their assets.
As a result, most Bitcoiners have to sell their Bitcoin (and face tax implications) or let it sit idly in cold storage.
Zest aims to solve this problem.
“A resilient capital market will be a major factor in Bitcoin reaching the next billion users,” said Muneeb Ali, co-founder and CEO of Trust Machines. “The team at Zest is mission-driven to make Bitcoin a truly viable global reserve asset in the next decade.”
When Zest unlocks Bitcoin borrowing and lending, it will activate the Bitcoin economy — borrowing and lending are essential for any financial ecosystem.
The technology behind Zest is far from simple.
“Stacks is our Secret Sauce”
Zest will enable non-custodial Bitcoin borrowing and lending via the power of sBTC, a 1:1 Bitcoin-backed asset coming to Stacks. For now, Zest is live in the form of the Zest Protocol Stacks Market.
Let’s walk through how it works, guided by this diagram from the Zest Protocol Docs.
A user deposits Bitcoin into the Zest Protocol via a Bitcoin transaction.
The user’s BTC gets wrapped into a tokenized version of BTC called sBTC. As sBTC, the user’s Bitcoin has enhanced capabilities, making lending and borrowing via the Zest Protocol possible.
While sBTC is working in the Zest Protocol, the user’s BTC is held in a threshold-signature script via the Stacks network.
When a user wants to withdraw their BTC from Zest Protocol, Stacks’ Proof of Transfer consensus mechanism enables the signer network of economically incentivized threshold signers to safely unwrap sBTC back to native BTC.
The user receives their native BTC, and sBTC is destroyed.
In summary, users convert their BTC into sBTC, which enables borrowing and lending through Zest. Powered by Stacks, users can get their BTC back when they choose in a trust-minimized fashion.
Zest Protocol Unleashes the Bitcoin Economy
Safely borrowing and lending Bitcoin is not technically easy. But users want it to gain leverage on their Bitcoin, and the Bitcoin economy will be strengthened with additional liquidity.
Zest Protocol, powered by Stacks and sBTC, makes this possible.