Binance Labs Invests in Zest Protocol to Introduce On-Chain Bitcoin Lending on Stacks Blockchain

Binance Labs, the venture capital and incubation arm of Binance, has invested in Zest Protocol, an on-chain bitcoin lending infrastructure enabling users to lend or borrow native BTC with transparent yields in a permissionless way. 

Existing solutions have been largely dependent on centralized entities with opaque lenders or a federation of trusted committees and custodians. This has historically presented additional fees that make interactions with lending protocols uneconomical.

Zest Protocol leverages the upcoming Stacks Nakamoto and sBTC blockchain upgrades to create a Bitcoin native lending experience. Using sBTC’s unique peg-in wire format, users deposit BTC through a native Bitcoin transaction to fund their balance on Zest Protocol - after which they are able to engage in lending or yield generating activities. In preparation for the sBTC launch, Zest Protocol’s lending infrastructure is currently live on Stacks mainnet with Stacks market. 

The protocol will comprise two types of BTC liquidity pools: Earn pools, where users earn a yield on their BTC as liquidity providers, and Borrow pools, where users borrow against their BTC. Zest Protocol’s BTC yield pools will leverage pool delegates as credit experts. These delegates will conduct due diligence, manage the rates of liquidity pools and agree upon terms with borrowers. 

Yi He, Co-Founder of Binance and Head of Binance Labs commented: “Zest Protocol's technology addresses the needs of Bitcoin holders and borrowers, unlocking the potential for Bitcoin programmability and interoperability. At Binance Labs, we are always seeking first movers shaping the industry, and we look forward to witnessing Stack's Nakamoto upgrade propel Zest Protocol’s growth.”

"We’re excited to work with Binance Labs to redefine Bitcoin lending. We’re here to complete the long-overdue task of moving Bitcoin lending markets on-chain, where they belong." said Tycho Onnasch, Founder of Zest Protocol.

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About Zest Protocol

Zest Protocol is a lending protocol built for Bitcoin. Zest Protocol exists to redefine Bitcoin lending. The protocol strives to create a vibrant borrowing and lending ecosystem around BTC the asset. For more information, visit www.zestprotocol.com 

About Binance Labs

As the venture capital arm and accelerator of Binance, Binance Labs has now grown to be worth over $10 billion. Its portfolio covers 250 projects from over 25 countries across six continents and has a return on investment rate of over 14X. Fifty of Binance Labs’ portfolio companies are projects that have gone through our incubation programs. For more information, follow Binance Labs on X.

Disclaimer: The information provided in this article is intended for informational purposes only and does not constitute investment advice, endorsement, analysis, or recommendations with respect to any financial instruments, investments, or issuers. This article may contain forward-looking statements which are by nature subject to risks and uncertainties. Investment in cryptocurrency and DeFi projects involves substantial risk, including the risk of complete loss. This article does not take into account the investment objectives, financial situation, or specific needs of any particular person and each individual is urged to consult their legal and financial advisors before making any investment decisions.