Zest Protocol Integrates With Stacks-Based Babylon for Advanced BTC Yield

As a seasoned analyst with a profound interest in DeFi and Blockchain technology, I find the collaboration between Zest Protocol and Babylon through BTCz particularly intriguing. With my background in the industry dating back to the early days of Trust Machines, I’ve witnessed firsthand the groundbreaking work of Muneeb Ali and his team. The integration of Stacks L2 for security and Babylon for yield is a game-changer for Bitcoin DeFi, especially when considering the upcoming sBTC launch in Q4 2024.


In simpler terms, Zest Protocol, a key player in Bitcoin DeFi, unveils BTCz for public use. This enables users to invest their Bitcoins to generate returns in the form of native Bitcoin earnings, all while ensuring a smooth and safe experience. Holders of BTCz can earn passive income through staking, with added security provided by the Babylon Protocol and the innovative Bitcoin L2 Stacks technology

Zest Protocol introduces BTCz staking instrument to Bitcoin DeFi segment

Supported by Tim Draper and Muneeb Ali, the Bitcoin (BTC) on-chain lending platform Zest Protocol has revealed its integration with Babylon, a Stacks-based system. This partnership gives rise to a combined product, BTCz, which enables stakers to earn returns in Bitcoin (BTC)

/ Let’s unite the finest aspects of @babylonlabs_io and @Stacks!

— Zest Protocol 🍊 (@ZestProtocol) September 5, 2024

Stacks, being the foremost L2 for Bitcoin, offers exclusive security benefits to the Zest Protocol. Notably, Stacks’ smart contracts possess a distinct capability to access Bitcoin’s current state, thereby enabling these contracts to independently authenticate alterations in Bitcoin holdings

Through the Babylon staking protocol, Zest Protocol’s BTC staking agreement on the Stacks L2 can independently confirm Bitcoin L1 stakes, eliminating the need for a third-party oracle or communication platform

Leveraging Babylon’s trust-minimized structure, this setup paves the way for BTCz to emerge as the most dependable staking platform for BTC derivatives

Tycho Onnasch, creator of Zest Protocol, expresses enthusiasm about the advancements the latest partnership introduces to Bitcoin’s Decentralized Finance (DeFi) sector, focusing particularly on on-chain staking

In Q4 of 2024, Zest Protocol’s BTCz will join sBTC as a yield-earning sibling within the Stacks ecosystem. The yield-generating Bitcoin asset (BTCz) combined with sBTC will be essential for the secure adoption of decentralized finance (DeFi) using Bitcoin, developed by the team behind Stacks’ sBTC. This marks the beginning of our lineup of yield-producing Bitcoin products on Zest Protocol Earn

Moreover, the recent partnership is anticipated to significantly boost the expansion of Decentralized Finance (DeFi) within the Bitcoin ecosystem, a significant sector anticipated to thrive in 2024

Stacks’ sBTC also accepted by new solution

Fisher Yuwelcomes the Zest Protocol solution with enthusiasm, emphasizing its significant role in simplifying Bitcoin (BTC) staking within the Babylon platform

We’re thrilled to witness Zest Protocol using our technology to boost Bitcoin earnings within the Stacks platform. We eagerly anticipate monitoring the impact of this innovative approach on the wider Bitcoin community

Apart from using Stacks L2’s read access to Bitcoin’s state for security, Zest Protocol plans to gradually decentralize its BTCz system in line with the Stacks sBTC design. This move aims to establish a fully decentralized and permissionless peg. Users will have the option to deposit sBTC, earning yield through BTCz

The founders of Zest Protocol have extensive experience in creating applications and structures for Bitcoin, having been among the early employees at Trust Machines, a pioneering company specializing in Bitcoin infrastructure under the leadership of Stacks co-creator Muneeb Ali. During their tenure at Trust Machines, they significantly contributed to the conceptualization and construction of sBTC

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2024-09-05 19:12