Draper Associates, the venture capital firm led by renowned investor Tim Draper, has taken the lead in a $3.5 million seed funding round for Zest Protocol, a Bitcoin lending market built on the Stacks platform. The round also saw participation from Binance Labs, Flow Traders, Trust Machines, and other investors who recognize the potential impact of Zest on Bitcoin’s usability.
Zest Protocol aims to provide a seamless experience for Bitcoin holders who want to make use of their capital in markets, whether through lending or generating yields in smart contract-enabled blockchains. Users will be able to fund their accounts with a simple BTC transaction, taking advantage of the upcoming SBTC upgrade, which will enable more secure and trustless movement of the base asset across different layers.
Tycho Onnasch, the founder of Zest Protocol, emphasized the importance of layer 2 initiatives in expanding decentralized finance to Bitcoin. He highlighted that the next wave of innovation will be driven by second-layer protocols, as Bitcoin’s primary layer does not support the creation of essential DeFi features like liquidity pools.
Draper acknowledged the current limitations of the Bitcoin protocol and expressed his desire to use his BTC holdings in a productive manner. He has attempted various experiments without finding an easy solution, making him eager to see how Zest Protocol addresses Bitcoin’s usability problem.
Zest Protocol’s lending infrastructure is already operational on the Stacks mainnet and will adapt to the upcoming SBTC upgrade once it becomes available.
What are your thoughts on Zest Protocol’s proposal for Bitcoin lending and its successful $3.5 million seed round? Share your opinions in the comments section below.
