What Zest Protocol does

Zest Protocol is a decentralized finance (DeFi) lending protocol built on the Stacks blockchain, a Bitcoin Layer 2, using Clarity smart contracts. Incorporated as Zest Protocol Labs in the Cayman Islands and founded in 2022, the company operates with a lean team (6 employees as of May 2024) and has raised approximately $7.8 million across a $3.5 million seed round in May 2024 (led by Draper Associates, with participation from Binance Labs/YZi Labs, Flow Traders, Trust Machines, and other funds) and a $4.315 million SAFE offering filed with the SEC in April 2026. Its flagship product, Stacks Market, is a fully on-chain, permissionless, overcollateralized lending and borrowing platform where users supply assets (STX, sBTC, stSTX, USDCx and others) to earn yield or borrow against collateral. The protocol has reached the #1 DeFi position on the Stacks network, with peak total deposits exceeding $100 million and peak borrowing activity of approximately $10 million.

The protocol generates revenue through on-chain mechanisms: the reserve factor on interest rate spreads (dynamically set by utilization), flash loan fees, and origination fees. Distribution is entirely product-led and community-driven, with users accessing the protocol at app.zestprotocol.com via compatible Stacks wallets (Leather, Xverse, OKX Wallet, Fordefi, Asigna, Orange Wallet); no KYC, no sales team, and no enterprise motion exist. The product surface extends beyond core lending to include BTCz (a yield-bearing Bitcoin liquid staking token co-developed with Babylon Labs), USDh stablecoin integration via Hermetica, USDCx via the Circle/Stacks partnership in Stacks Market V2, and Bitcoin Collateral Vaults powered by sBTC. Security is maintained through multiple Clarity smart contract audits (Clarity Alliance, Thesis Defense), Pyth oracle integration with a stricter-than-default 3-minute staleness threshold and conservative confidence-interval pricing, and a $100,000 Immunefi bug bounty program.

The ZEST token is the native governance and staking token, bridged across BNB Chain, Ethereum, Base, and Stacks.

Name

Zest Protocol

Legal name

Zest Protocol Labs

Website

https://zestprotocol.com

Company type

Private

Founded year

2022

Operating status

Operating

Headcount range

1–10 employees

Short description

Zest Protocol is a decentralized Bitcoin lending protocol built on the Stacks Layer 2, enabling users to supply or borrow against BTC-backed assets through permissionless smart contracts. Stacks Market serves crypto-native Bitcoin holders and DeFi yield seekers.

Ownership category

akta.pro rank

Product category

Bitcoin DeFi Lending Protocol

NAICS

Financial Transactions Processing, Reserve, and Clearinghouse Activities (522320), Investment Banking and Securities Intermediation (523150)

SIC

Loan Brokers (6163), Commodity Contracts Brokers & Dealers (6221)

akta.pro primary industry

Decentralized Lending Protocols (DeFi Money Markets) (FSADAFAB)

akta.pro secondary industries

Decentralized Lending & Borrowing Protocols (FSADAMAA), Liquid Staking & Restaking Protocols (FSADAMAE)

Keywords

• Bitcoin DeFi lending
• Crypto lending protocol
• Overcollateralized borrowing
• Decentralized lending
• Bitcoin collateral vaults

Headquarters

HQ city

George Town

HQ country

Cayman Islands

Offices1 record

Markets served

GTM type

B2C

Offering type

Software

Cost components

Technology or R&D, Personnel, Operations, Marketing or Sales

Revenue model

1. Interest Rate Spread: Zest Protocol generates revenue through the spread between lending rates paid by borrowers and yield rates earned by suppliers. Borrowing rates are dynamically set based on pool utilization and adjust progressively, with a reserve factor determining the portion of interest that accrues to the protocol treasury.
2. Flash Loan Fees: The protocol charges fees for flash loan transactions. Both total flash loan fees and protocol-level fees can be configured per asset through the pool-reserve-data contract.
3. Origination Fees: Users pay an origination fee percentage when borrowing assets. The fee is calculated based on the amount borrowed and the asset's configured origination fee percentage, with decimal precision adjustments.
4. Reserve Factor: A configurable reserve factor determines what percentage of the interest generated on borrowed assets accrues to the protocol's reserve vault rather than being distributed entirely to lenders. This provides ongoing protocol revenue.

Go-to-market motion2 records

Distribution channels3 records

Marketing channels4 records

Core offering

Zest Protocol is a decentralized finance (DeFi) lending protocol built on the Stacks blockchain (Bitcoin Layer 2) using Clarity smart contracts. It offers Stacks Market, an overcollateralized borrowing and lending platform where users deposit assets such as STX, sBTC, stSTX, USDCx and others to earn yield or take out loans against their crypto collateral. The protocol also includes Bitcoin Collateral Vaults powered by sBTC and the BTCz liquid staking token developed with Babylon Labs.

Product overview

Zest Protocol is a Bitcoin-native DeFi protocol built on Stacks (Bitcoin Layer 2), offering a platform-plus-modules architecture centered on Stacks Market. The core offering is Stacks Market (V1 and V2), enabling non-custodial peer-to-peer Bitcoin lending and borrowing. The ecosystem includes Bitcoin Collateral Vaults (sBTC-powered), the BTCz yield-bearing token for Bitcoin liquid staking via Babylon Labs, USDh stablecoin integration via Hermetica, and USDCx stablecoin via Circle partnership. The ZEST token serves as the native protocol token across multiple chains (BNB, Ethereum, Base, Stacks). The platform targets Bitcoin holders seeking to earn yield or access liquidity without selling their BTC.

Differentiator

Problem solved

Functional benefit

Brands

• Stacks Market: The primary DeFi protocol product enabling users to unlock liquidity by borrowing against their assets, with deposits and borrowing activity peaked at $100M+ and ~$10M respectively.
• BTCz

Products and services

• Stacks Market V2 The primary DeFi lending market on the Stacks network, enabling users to supply assets such as STX, sBTC, stSTX, and USDCx to earn yield or take overcollateralized loans. Currently the top DeFi protocol on Stacks with peak deposits exceeding $100M and borrowing activity peaking around $10M.
• Bitcoin Collateral Vaults Vault-based product enabling Bitcoin holders to use sBTC as collateral to borrow assets or earn yield without selling their Bitcoin exposure on the Stacks network.
• BTCz Yield-bearing Bitcoin token for liquid staking on Stacks, issued in partnership with Babylon Labs, that enables Bitcoin holders to earn staking rewards while maintaining BTC exposure.
• ZEST Token Native protocol token of Zest Protocol, live on BNB Chain, Ethereum, Base, and Stacks, used for governance and staking within the Zest ecosystem and bridgeable across chains.

Quantifiable outcome

• Total deposits peaked at $100M+ on Stacks Market
• +3 more outcomes

Segments4 records

Ideal customer profiles3 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Integration12 records

Feature8 records

Partnerships

Eight partnerships are on record, tiered major, core and minor.

• HermeticamajorStrategic or Co-development Partner · 22 January 2025Hermetica partnered with Zest Protocol to introduce $sBTC, a yield-bearing version of USDh stablecoin. Zest Protocol integrates $sBTC into its liquidation infrastructure, providing deeper stablecoin liquidity for the protocol. This partnership enhances Zest's stablecoin capabilities.
• Babylon LabscoreStrategic or Co-development Partner · 20 September 2024Zest Protocol partnered with Babylon Labs to launch BTCz, a yield-bearing Bitcoin token. Babylon Labs provides the underlying BTC staking infrastructure that powers BTCz, while Zest Protocol provides the DeFi access layer and liquidity for BTCz. This is a co-development partnership for a key product feature.
• Orange WalletmajorTechnology or Integration · 20 September 2024Orange Wallet integrated with Zest Protocol to unlock yield opportunities for its users. This integration allows Orange Wallet users to access Zest Protocol's lending and borrowing services directly through the wallet interface, providing a convenient access point for the protocol.
• Pyth NetworkcoreTechnology or IntegrationZest Protocol integrates with the Pyth oracle network for real-time token price feeds. Pyth, incubated by Jump Trading, provides up-to-date price data for all assets on the platform. Zest uses Pyth's confidence interval data and enforces stricter staleness thresholds than Pyth's default for enhanced security.
• CirclecoreTechnology or IntegrationThrough the Stacks-Circle partnership, USDCx (USDC-backed stablecoin issued in partnership with Circle) became the primary stablecoin in the Stacks ecosystem and V2 market. This provides Zest Protocol with tier-1 stablecoin infrastructure backed by the most trusted and globally regulated stablecoin.
• Clarity AllianceminorOthersClarity Alliance audited Zest Protocol's smart contracts and E-Mode functionality. The audit reports are publicly available on GitHub, providing security validation for the protocol's core functionality.
• Thesis DefenseminorOthersThesis Defense conducted a security audit of Zest Protocol's smart contracts. The audit report is publicly available and covers the core borrowing and lending functionality.
• ImmunefiminorOthersZest Protocol maintains an active bug bounty program in collaboration with Immunefi, offering rewards up to $100,000 for identifying bugs and vulnerabilities in the smart contracts. This ongoing program provides ongoing security validation.

Scale indicators6 records

Recent moves6 records

Expansion highlights6 records

Broad incumbents

• Aave: Largest DeFi lending protocol with multi-chain deployment (Ethereum, Polygon, Arbitrum, etc.) and tens of billions in TVL. Comparable as a decentralized lending/borrowing protocol with overcollateralized loans, dynamic interest rates, and isolation mode-style risk features—Zest is essentially the Stacks-native counterpart of Aave's product model.
• Compound: Pioneer DeFi lending protocol on Ethereum with similar overcollateralized borrowing/lending model and algorithmic interest rates. Comparable as a permissionless DeFi money market with cToken-style supply mechanics and pool-based liquidity that mirrors Zest's Stacks Market architecture.

Direct peers

• Sovryn: Bitcoin DeFi lending and trading protocol built on RSK (another Bitcoin L2). Most direct competitor to Zest as it targets the same use case (lending against BTC and Bitcoin-native assets) within a Bitcoin sidechain/L2 ecosystem, making it the closest functional analog.
• Liquidium: Bitcoin-native lending protocol allowing borrowing against Bitcoin Ordinals and BRC-20 assets. Direct peer competing for the Bitcoin-holder liquidity use case on a Bitcoin-aligned chain; comparable product offering (BTC-collateralized loans) targeting similar crypto-native users.
• Morpho: Ethereum-based DeFi lending protocol offering both pooled markets (Morpho Blue) and peer-to-peer matching optimization. Comparable as a next-generation DeFi lending protocol emphasizing capital efficiency and isolated markets—similar positioning to Zest's E-Mode and isolation features.
• Spark Protocol: DeFi lending protocol spun out of MakerDAO/Sky, focused on DAI/USDS stablecoin lending and BTC-collateralized borrowing via Morpho integration. Comparable as a DeFi lending venue focused on stablecoin liquidity and BTC-backed loans, with institutional orientation similar to Zest's positioning.
• Silo Finance: Isolated lending markets DeFi protocol where each asset has its own risk silo. Comparable to Zest's Isolation Mode feature, which limits cross-asset contagion—Silohub-style architecture is conceptually similar to Zest's risk-isolated design philosophy.
• Maple Finance: DeFi credit marketplace for institutional borrowers, with overcollateralized and undercollateralized loan pools. Comparable as a crypto-native lending protocol with multi-stream fee model (origination, servicing) and credit-market infrastructure orientation similar to Zest's lending architecture.

Emerging players

• Babylon Labs: Bitcoin staking protocol enabling BTC holders to stake and earn yield via restaking. Listed as Zest's partner for BTCz, but also a potential competitor/ecosystem risk—Babylon's broader staking ambitions could overlap with or supersede Zest's BTC yield product surface.

Others

• Stacks (Blockstack): Bitcoin Layer 2 network on which Zest Protocol is built. Not a direct competitor but a critical infrastructure dependency and ecosystem enabler—Zest's TAM is bounded by Stacks' adoption, and ZEST token governance depends on Stacks network effects.

Market position

Strengths4 records

Weaknesses4 records

Competitive moat4 records

Key risks6 records

Key highlights6 records

Customer concentration

• Xx.com/zestprotocol
• GitHubgithub.com/Zest-Protocol
• LinkedInlinkedin.com/company/zest-protocol

Compliance4 records

Revenue estimate

Valuation estimate

Number of profiles

Profiles3 records

Funding overview

Funding rounds2 records

Investors13 records

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Zest Protocol