YEREVAN (CoinChapter.com) — Zest Protocol, backed by Binance Labs and Tim Draper, has introduced a yield-bearing BTCz token. This new token aims to increase attention on decentralized finance (DeFi) in the Bitcoin ecosystem. Bitcoin holders can now earn staking rewards with the BTCz token through the Babylon Protocol.
According to Zest Protocol co-founder Tycho Onnasch, the BTCz token will allow passive yield generation while maintaining liquidity. He highlighted that while there are more than 10 Bitcoin-derived assets available, BTCz claim to fame lies in its use of Stacks’ security features.
BTCz Offers Unique Benefits Compared to Other Bitcoin Assets
Onnasch explained that BTCz is designed with enhanced security through Stacks’ infrastructure. This sets it apart from other Bitcoin-based tokens that offer similar yield opportunities. The token is paired with sBTC, another Stacks-based token, to promote secure Bitcoin DeFi adoption.
The new BTCz token is part of Zest Protocol’s broader plan to introduce more Bitcoin yield products. Onnasch mentioned that pairing BTCz with sBTC is important for increasing Bitcoin DeFi usage. While the full potential of BTCz is promising, the specific yield percentage for holders remains unknown.
Babylon Protocol’s Yield Percentage Still Unrevealed
The Babylon Protocol will eventually provide staking rewards, but the yield percentage for BTCz is not yet determined. Currently, Bitcoin on the Babylon Protocol does not generate staking rewards. However, Onnasch stated that Babylon will begin validating proof-of-stake (PoS) networks in the coming months, allowing yield generation through BTCz.
Onnasch added that the Babylon Protocol’s validation of PoS networks will determine the BTCz token’s yield, offering Bitcoin holders opportunities to benefit once the system is fully operational.
Growing Interest in Bitcoin DeFi After Bitcoin Halving
Zest Protocol’s launch of BTCz is a time of growing interest in Bitcoin DeFi, especially following the 2024 Bitcoin halving. The introduction of the Runes protocol earlier this year has sparked new developments aimed at bringing DeFi features to Bitcoin.
In May, Hermetica introduced USDh, a Bitcoin-backed synthetic United States dollar with a yield of up to 25%. Additionally, Coinbase announced plans for Wrapped Bitcoin (cbBTC) in August, which generated significant excitement among Bitcoin DeFi participants.
cbBTC announcement. Source: Coinbase
Rena Shah, COO of Trust Machines, emphasized that cbBTC could expand Bitcoin DeFi adoption, particularly by attracting Coinbase’s existing user base to the ecosystem.
Zest Protocol Adds to Expanding Bitcoin DeFi Ecosystem
Zest Protocol’s BTCz token is the latest in a series of Bitcoin DeFi solutions introduced in 2024. As more platforms develop Bitcoin-based financial products, the ecosystem continues to grow.
In July, Arthur Hayes’ Maelstrom fund announced a $250,000 grant program to support developers advancing Bitcoin’s infrastructure. This grant aims to drive further technical improvements and innovation within the Bitcoin network.
Zest Protocol’s BTCz offers Bitcoin holders an option to earn staking rewards while retaining liquidity. Certainly, the token’s full yield potential will become clearer as the Babylon Protocol progresses.
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