Zest
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Zest Protocol is a self-custodial lending protocol for Bitcoin that lets users borrow stablecoins against their BTC and earn yield in BTC, using BitVM to keep collateral on the Bitcoin base layer. It operates a market on the Stacks Bitcoin L2 where users deposit assets like sBTC, STX, and stSTX to earn yield or borrow stablecoins, serving both retail and institutional DeFi users.
Also known as Zest Protocol
Founders & leadership
Investors Β· 6
Company profile
researched Aug 2026Zest Protocol is a decentralized lending protocol focused on Bitcoin collateral. Its established product is the Zest Protocol Stacks Market, a lending market on the Stacks Bitcoin L2 that has been live on mainnet since March 2024. Users deposit Stacks-native assets such as sBTC, STX and stSTX to earn yield, or post them as collateral for overcollateralised loans in stablecoins including Circle's USDCx and USDh. The market uses risk groups to isolate asset exposure and soft liquidations that unwind positions gradually to reduce slippage. The company states BTC deposits earn roughly 1.5% APY, accruing both to idle supply and to BTC used as collateral.
Around the Stacks market, Zest operates additional products: Stacks Swap, a DEX aggregator that compares prices across Stacks decentralized exchanges and routes swaps across pools and intermediate tokens in a single atomic transaction with on-chain minimum-received protection; and Stacks Vaults, announced as coming soon, offering automated single-asset yield strategies. The first planned vault is a Levered Bitcoin Staking Vault accepting BTC, sBTC or stBTC and targeting 6-8% APY sourced from Stacks Bitcoin Staking rewards, with the vault contract restricted to executing strategy actions on Zest's own markets and withdrawals limited to the depositor.
The company's next product line is Bitcoin Collateral Vaults, announced at Draper Summit 2026 and slated to launch in 2026. The design keeps BTC locked on the Bitcoin base layer in user custody while stablecoins are borrowed against it from DeFi pools on Ethereum and other EVM chains, using BitVM so that Bitcoin L1 can verify the state of a lending market on another chain. Zest describes this as avoiding wrapped BTC, bridges, custodians and rehypothecation. Zest also has a native token, $ZEST, deployed on BNB Chain, Stacks, Ethereum and Base and traded on centralized and decentralized venues across spot and perpetual pairs; the company states governance and staking will activate later, with current priority on shipping Bitcoin Collateral Vaults and growing TVL.
Business model
Zest operates on-chain lending markets, a swap aggregator and (planned) automated yield vaults, intermediating between depositors who supply assets for yield and borrowers who take overcollateralised stablecoin loans against Bitcoin and Stacks assets. A native token, $ZEST, is issued and traded, with governance and staking utility stated as planned once the protocol reaches sufficient scale.
Traction
The Stacks Market reports $100M+ peak TVL, 800+ sBTC/BTC deposited, more than 1,500 liquidations executed with zero bad debt, and over two years of mainnet history since its March 2024 launch. The company states it holds the majority of all Stacks TVL and stablecoins and that its market is used by institutions.
Latest developments
Stacks Market V2 went live in Q4 2025. Zest announced Bitcoin Collateral Vaults at Draper Summit 2026, a BitVM-based product launching in 2026 that lets users borrow stablecoins on EVM chains against BTC held on Bitcoin L1. Stacks Vaults, beginning with a Levered Bitcoin Staking Vault targeting 6-8% APY, are listed as coming soon. The $ZEST token is trading across centralized and decentralized exchanges, with governance and staking deferred until the protocol has greater scale.
βΈFull profile β market position, technology, go-to-market, history, risks & controversies
Market position
Zest describes itself as the leading Bitcoin lending protocol and the largest lending protocol on Bitcoin L2s, and as the DeFi superapp for Stacks holding the majority of Stacks TVL and stablecoins.
Zest positions its collateral model around non-custodial, non-bridged BTC: collateral remains on Bitcoin L1 rather than being wrapped or handed to a custodian, with vault rules enforced via BitVM and no rehypothecation. It also cites operational track record β mainnet since March 2024, 1,500+ liquidations processed with zero bad debt β and describes itself as the largest lending protocol on Bitcoin L2s and a DeFi superapp for Stacks holding the majority of Stacks TVL and stablecoins.
Technology
The Stacks Market runs as smart contracts on the Stacks Bitcoin L2, with documented V1 and V2 contract sets, published audits and error codes, risk groups for isolating asset exposure and soft liquidation mechanics. The forthcoming Bitcoin Collateral Vaults rely on BitVM to let Bitcoin L1 verify the state of a lending market on another chain, enabling BTC to remain on the base layer under user custody while loans are issued on EVM chains. Stacks Swap performs multi-pool and multi-hop routing settled atomically with on-chain minimum-received price protection. The $ZEST token is deployed across BNB Chain, Stacks, Ethereum and Base with a documented bridging path.
Go-to-market
Direct-to-user web application for depositing, borrowing and swapping, supported by public documentation, a company blog, newsletter and community channels; the Bitcoin Collateral Vaults product was announced publicly at the Draper Summit 2026 conference.
BTC holders seeking yield or stablecoin liquidity without selling their Bitcoin, Stacks DeFi users, and institutions β the company states its Stacks market is used by leading institutions and describes a blog topic on undercollateralized Bitcoin loans for institutional borrowers.
History
The team describes itself as early contributors building on Stacks from 2021-24 and building on Bitcoin since 2020. The Zest Stacks lending market launched in Q1 2024 (March 2024), followed by the Stacks Nakamoto upgrade in Q1 2025 and Stacks Market V2 in Q4 2025. The BTCz product was phased out as part of a protocol refocus. Bitcoin Collateral Vaults were announced at Draper Summit 2026 with launch planned for 2026.
Risks & controversies
The BTCz product was sunset as part of a protocol refocus. The Bitcoin Collateral Vaults product is not yet live, with launch stated for 2026, and the BitVM-based design has not yet operated on mainnet. Governance and staking utility for the $ZEST token are not active.
Compiled by commissioned research from 8 cited public sources β announcements, filings, and press listed under research sources below.
Key figures
latest reportedCompany-reported or press-reported figures, each dated to when it was claimed β not independently audited.
Timeline Β· 5
launches, deals, and filingsThe native $ZEST token trades on centralized and decentralized exchanges across spot and perpetual pairs, with contracts deployed on BNB Chain, Stacks, Ethereum and Base. Governance and staking are stated as activating later.
Zest announced Bitcoin Collateral Vaults, which let users borrow stablecoins on EVM chains against BTC that remains in self-custody on Bitcoin L1, enforced via BitVM. Launch is stated for 2026.
Zest launched version 2 of its Stacks lending market in Q4 2025, with a new market design, V2 contracts and a liquidity migration from V1.
Zest phased out its BTCz product as part of a broader protocol refocus.
The Zest Protocol Stacks Market went live in Q1 2024 (March 2024), allowing deposits of canonical Stacks assets such as sBTC, STX and stSTX to earn yield and borrow against as collateral.
Dated company events from announcements, filings, and press; legal rows summarize public dockets and regulator releases.
In the news
βΈResearch sources Β· 8
primary sources listed
- Zestzestprotocol.com Β· web
8 public sources were cited for this profile; the first-party ones are listed here.
Frequently asked questions
- What does Zest do?
- Zest Protocol is a Bitcoin lending protocol where BTC holders earn yield and borrow stablecoins against their Bitcoin.
- Who founded Zest?
- Zest was founded by Tycho Onnasch.
- Who are Zest's investors?
- Zest's investors include Draper Associates, Gossamer Capital, Hyperithm, Marin Digital Ventures, MitonC, Asymmetric.