Zest Raises $3.5M, Led by Tim Draper, for On-Chain Bitcoin Lending Using Stacks

Zest Protocol uses Nakamoto upgrade with Bitcoin layer-2 Stacks and bridge asset sBTC.

Projects like Zest are trying to use layer 2 networks like Stacks to bring DeFi features to Bitcoin that are featured on other chains like Ethereum.

Bitcoin lending protocol Zest has raised $3.5 million to enable Bitcoin {{BTC}} holders to distribute their assets on-chain and earn returns.

The seed raise was led by billionaire investor Tim Draper with participation from Binance Labs, Flow Traders, Trust Machines and others, Zest Protocol announced via email on Monday.

Zest Protocol uses Nakamoto upgrade with Bitcoin layer 2 Stacks and bridge asset sBTC (pegged 1:1 to bitcoin) to create a lending experience completely native to the world’s largest blockchain network.

Users will rely on sBTC to send bitcoins to fund their balances on the Zest Protocol, which lives on the Stacks mainnet, and can then engage in lending or other revenue-generating activities.

“Bitcoin L2s like Stacks will play a key role in unlocking Bitcoin DeFi,” said Tycho Onnasch, founder of Zest Protocol. “Unlike Ethereum, creating core DeFi primitives such as liquidity pools is not possible on Bitcoin L1. “The Stacks sBTC upgrade will be a turning point for Bitcoin DeFi and has been designed for this from the beginning.”

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