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Zest Protocol (ZEST) is a decentralized lending protocol designed for the Bitcoin ecosystem. It mainly runs on the Stacks network and allows users to use assets such as BTC, sBTC, and STX for on-chain collateralized lending, yield generation, and liquidity management.

sBTC, Stacks, and Zest Protocol are key components of the Bitcoin DeFi, or BTCFi, ecosystem. Stacks provides Bitcoin with smart contract functionality and Layer2 scaling capabilities. sBTC brings BTC into a programmable on-chain environment, while Zest Protocol builds BTC lending markets and on-chain financial protocols on top of this infrastructure. Together, the three help Bitcoin evolve from a pure store-of-value asset into a financial asset system that can participate in lending, yield, and on-chain liquidity.

Zest Protocol and Aave are both decentralized lending protocols in the crypto market. They allow users to obtain on-chain liquidity by collateralizing assets, while also providing interest income to depositors. However, the ecosystems they operate in are not the same. Aave is a representative protocol within the Ethereum DeFi system, while Zest Protocol is more closely aligned with Bitcoin DeFi, or BTCFi, infrastructure. Its goal is to allow BTC assets to participate in on-chain financial activity as well.

Zest Protocol’s lending process uses an overcollateralized model. Users deposit assets such as BTC, sBTC, or STX to obtain borrowing capacity, then complete borrowing, interest rate calculation, and risk liquidation through on-chain smart contracts. Unlike Ethereum DeFi lending protocols, Zest Protocol operates within the Bitcoin Layer2 and BTCFi environment, so its lending structure relies more heavily on the Stacks network and the asset expansion capabilities of sBTC. The protocol’s core goal is to improve BTC capital efficiency while preserving Bitcoin’s security, and to build native lending infrastructure for Bitcoin DeFi.

This article takes stock of the DeFi projects in the Stacks ecosystem.

Explore the exciting world of Bitcoin DeFi! This comprehensive guide delves into the top Bitcoin DeFi projects, their functionalities, and the future prospects of Bitcoin in decentralized finance.

Explore the projects within the Blast ecosystem, including DEXs, derivatives, NFT games, and their advantages for users and developers. Discover which projects are worth your attention.

The article analyzes how to implement Layer2 solutions, change community awareness, improve infrastructure and other measures to promote the growth of the Bitcoin ecosystem, cover and surpass the scale of Ethereum, and achieve a new chapter in blockchain development.

This article explores the potential of Bitcoin Layer 2 (L2) technology in trustless financial systems and predicts the impact of institutional adoption of Bitcoin spot ETFs.

ETH Layer2 uses Rollups to package hundreds of transactions into one submission to the Ethereum mainnet, thereby the transaction fees will be divided to all Rollup users, reducing fees per user. Transaction data in the Rollups is submitted to Layer1, but executions are carried out independently by the Rollups. By submitting transaction data to Layer1, Rollups can inherit the security of Ethereum because once the data is uploaded to Layer1, rolling back Rollups transactions requires the data to be rolled back on Layer1.

This article introduces how Stacks brings smart contracts to the Bitcoin blockchain and discusses the investment value of the STX token. Stacks achieves symbiosis with Bitcoin through the POX consensus mechanism, where miners earn STX rewards by producing blocks, and holders earn BTC rewards by participating in Stacking. Stacks also implements the sBTC mechanism, allowing smart contracts to read Bitcoin state and settle transactions on the Bitcoin chain. With a first-mover advantage, Stacks' ecosystem covers areas such as wallets, NFTs, DEX, DeFi, etc., and STX, as the native token, holds long-term investment value. With the development of the Bitcoin L2 track, the Stacks ecosystem is poised for significant growth, demonstrating enormous potential.