Zest Protocol Unveils Leveraged Bitcoin Staking Vault on Stacks

Zest Protocol has launched its first automated Stacks Vault product, the zvstBTC vault, which allows users to earn higher yields on their Bitcoin holdings.

The zavtBTC vault uses a leveraged loop strategy to amplify the base yield of staking tokens. Users deposit Bitcoin assets like stBTC or BTC into the vault and receive zvstBTC shares in return. The vault then posts stBTC as collateral, borrows sBTC against it, and recycles those borrowed assets back into staking positions.

The unlevered staking rate for stBTC is around 2.6% APY, but Zest's vault aims to stretch that to 6-8% APY through its looping strategy.

Initial deposits are capped at 10 BTC, which allows the protocol to stress-test the strategy with manageable risk before opening up more capacity.