Zest, Backed by Binance, Launches Yield-Bearing BTCz Token

September 06, 2024 03:37 PM AEST | By Team Kalkine Media

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Zest, Backed by Binance, Launches Yield-Bearing BTCz Token — Image source: shutterstock

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The recent Bitcoin halving has spurred increased interest in developing decentralized finance (DeFi) solutions for Bitcoin, the pioneering blockchain network. Binance Labs and Tim Draper-backed Zest Protocol have introduced a new token, BTCz, designed to enhance Bitcoin's DeFi capabilities.

The BTCz token aims to allow {Bitcoin} (BTC) holders to receive staking rewards through the Babylon Protocol. This initiative represents a significant advancement in capital efficiency for Bitcoin, as noted by Tycho Onnasch, co-founder of Zest Protocol. The BTCz token is intended to provide yield similar to the Stacks’ sBTC token, although the specific yield percentage for BTCz remains undetermined, pending the final yield rates from the Babylon Protocol.

Zest Protocol is part of a broader movement to integrate DeFi functionality with Bitcoin, a concept referred to as Bitcoin DeFi (BTCFi). This paradigm seeks to expand the utility of Bitcoin by introducing various DeFi features to the network.

In 2024, Bitcoin DeFi saw notable developments. Following the Bitcoin halving, which introduced Runes—a new protocol for issuing fungible tokens on Bitcoin—several key innovations have emerged. In early May, Hermetica launched USDh, the first Bitcoin-backed synthetic U.S. dollar with yield-generating capabilities, offering an initial yield for users. In August, Coinbase, the world’s second-largest cryptocurrency exchange, unveiled plans for a new Wrapped Bitcoin (BTC) token named Coinbase BTC (cbBTC), generating excitement within the crypto community.

Rena Shah, Chief Operating Officer of Trust Machines, a firm focused on Bitcoin solutions, emphasized that these developments could significantly advance the adoption of Bitcoin-native DeFi. Additionally, in July, Arthur Hayes’ Maelstrom fund initiated a Bitcoin grant program, allocating substantial resources to support the technical advancement of the Bitcoin network.

Overall, the introduction of BTCz and other Bitcoin DeFi innovations highlights the evolving landscape of Bitcoin’s role in decentralized finance, reshaping how the world’s first cryptocurrency is utilized within the broader financial ecosystem.

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