Zest Protocol is a Bitcoin-focused lending protocol. It allows users to deposit supported assets and borrow against collateral through on-chain markets. Its lending market runs on Stacks, a Bitcoin layer 2, and supports assets such as STX, sBTC, stSTX, USDC and other assets.

ZEST is the protocol’s native token. It is designed to support the Zest Protocol ecosystem, with governance and staking planned for future activation once the protocol reaches a stage where these functions can support protocol activity.

The protocol’s V2 design uses a market contract to coordinate lending, borrowing, collateral management, liquidations, vault routing and oracle price checks. User positions and balances are stored in a separate market-vault contract, while asset registries and risk groups define supported assets and risk parameters.

ZEST is used within the Zest Protocol ecosystem. Governance and staking are planned but are not active at this stage, with the project currently focused on Bitcoin Collateral Vaults and protocol liquidity.

Zest Protocol is used for lending and borrowing. Depositors can supply assets to earn yield, while borrowers can access overcollateralised loans against supported assets. The protocol uses vaults for supported assets, issues zTokens as vault shares and uses oracle-based pricing for risk checks and liquidations.

ZEST can also be bridged between Stacks and BNB Chain through the protocol’s bridge process.

Zest Protocol was created by Tycho Onnasch, Fernando Foy and Emil E.

The project was incubated at Trust Machines, a Bitcoin product company founded by Muneeb Ali. Zest Protocol announced a $3.5 million seed round in May 2024 led by Draper Associates, with participation from Binance Labs, Flow Traders, Trust Machines and other investors.