Lending application Zest Protocol has officially launched its first lending markets on Bitcoin’s (BTC) layer-2 (L2) platform Stacks, allowing BTC holders to participate in on-chain money markets. This development comes ahead of Stacks’ Nakamoto upgrade, set to boost the Bitcoin finance (BTCfi) ecosystem built using its infrastructure.
“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, who incubated Zest Protocol in its early stage. “The team at Zest is mission-driven to make Bitcoin a truly viable global reserve asset in the next decade. This Stacks market launch helps them make the first step towards redefining Bitcoin lending.”
The anticipation around Runes, a new protocol for Bitcoin set to go live after the halving event, is capturing the attention of investors. BTCfi ecosystem surpassed $1.3 billion in total value locked (TVL), and Stacks represent over 10% of it, according to on-chain data aggregator DefiLlama.
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“While TVL on Stacks is still small, launching lending markets on Stacks provides us with the opportunity to deploy smart contract infrastructure that will be used for BTC lending in a production environment,” commented Zest Protocol co-founder Tycho Onnasch. “The growing Stacks DeFi ecosystem does not yet have many opportunities for leverage. Zest Protocol will provide these while laying a solid foundation for our launch of BTC lending markets later this year.”
Recognized as one of the best Bitcoin loan platforms by Blockworks in 2023, Zest Protocol’s commitment to security and innovation is underscored by its successful completion of a second smart contract audit with Coinfabrik in 2024, following an audit by Least Authority in 2023.