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Zest Protocol overview
Zest Protocol is a Bitcoin lending protocol. Zest operates on-chain and is open-source.
Zest enables Bitcoin liquidity providers to earn Bitcoin yield through professionally managed lending pools that lend to the most credit-worthy borrowers in crypto. For borrowers, Zest offers on-chain Bitcoin loans directly against their balance sheet.
- 1.Pool Delegate is onboarded by the DAO
- 2.Delegate creates profile and strategy
- 3.Delegate deploys and initiates Bitcoin pool
- 4.Liquidity Providers (LPs) review delegate profile and add Bitcoin liquidity
- 5.Borrower creates borrower profile and details loan terms
- 6.Delegate views borrower requests and conducts private diligence on terms directly with borrower
- 7.Once terms are agreed, borrower launches loan contract
- 8.Delegate funds the loan contract with Bitcoin from the pool
- 9.Borrower draws down the Bitcoin loan and stakes collateral in one transaction. An establishment fee is taken from drawdown and sent to the Zest Treasury
- 10.Borrower pays Bitcoin rewards according to the scheduled repayment cycle and pays Bitcoin principal with final repayment upon maturity
- 11.Delegates, liquidity providers, and cover providers can all claim available rewards throughout the process
These parameters are determined by the Pool Delegate & the DAO when first configuring and deploying the pool contract.
Pool delegate address: address that manages the pool.
Late fees: penalty fees when borrowers miss Bitcoin reward payments to the pool.
Premium fees: penalty fees when borrowers chose to repay early.
Pool cover Fee: the percentage of the Bitcoin rewards generated by the pool that is given to pool cover providers.
Pool Delegate Fee: the percentage of the Bitcoin rewards generated by the pool that is given to pool delegate.
Pool capacity: total Bitcoin liquidity value a pool will accept. Once this value is reached, the pool has no more capacity for additional Bitcoin liquidity.
Lockup period: this period determines the length of time Bitcoin liquidity in a pool must be locked prior to withdrawal by LPs. The period can be decreased by the pool delegate, but not increased.
Open To Public: whether anyone can add Bitcoin funds to the pool or only whitelisted addresses.
Cooldown Period: the cooldown period is a period of time require to pass after an LP or pool cover LP initiates withdraw.
Treasury Fee: Bitcoin fee sent to the Zest DAO Treasury from every loan drawn down from the protocol.
Grace period: amount of time a Bitcoin reward payment can be late without incurring premium fees on behalf of the borrower.