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Bitcoin Lending Firm Zest Protocol Receives $3.5 Million in Funding Led by Tim Draper

Jonathan Wong

Jonathan Wong

13 May 2024

According to a report, a Bitcoin lending startup has reached a funding round of $3.5 million, led by Tim Draper.

According to reports from Reuters, the venture capitalist Tim Draper spearheaded a funding round that resulted in the acquisition of $3.5 million by the Bitcoin lending firm Zest Protocol. Despite the fact that the cryptocurrency lending business is under regulatory investigation, the investment, which was backed by significant supporters such as Binance Labs and Flow Traders, indicates that there is rising confidence in the market.

The new company, which has six employees, utilizes a decentralized approach that permits peer-to-peer transactions without the need for intermediaries. This is in contrast to typical lending platforms. Through the provision of the ability for users to lend out their Bitcoins or borrow against them, Zest Protocol intends to cause a disruption in the Bitcoin lending industry. Because of this strategy, they are able to generate passive revenue.

In the midst of a crackdown by the United States Securities and Exchange Commission, Zest's founder, Tycho Onnasch, stressed the platform's deviation from regulatory targets. Using the funds that were received, the company intends to broaden the scope of its offerings, with the goal of launching all of them later this year. By highlighting the company's conservative approach to yield creation, Onnasch signaled a divergence from the high-yield offerings that were common in the early days of cryptocurrency.

According to Draper, who is well-known for his early investments in technology companies such as SpaceX, Tesla, and Coinbase, Bitcoin is expected to gain widespread acceptance. His endorsement brings attention to the recent growth of the leading cryptocurrency as an asset for institutional investors as well as the expanding ecosystem that surrounds it.

Within the past month, Bitcoin went through a process known as halving, which took place at block number 840,000. After the much-awaited event, the payout for mining a block was reduced by half, going from 6.25 Bitcoins to 3.125 Bitcoins. The consequences of this reduction are extremely far-reaching for miners, investors, and the Bitcoin ecosystem as a whole.

The protocol that governs Bitcoin stipulates that the halving process must be carried out until the maximum supply of 21 million Bitcoins is achieved. As of right now, approximately 19 million Bitcoins have been mined, and there are only two million more that have yet to be encountered. Any attempt to change this established algorithm would necessitate reaching an agreement among Bitcoin miners, which is an accomplishment that is extremely difficult to achieve due to the decentralized structure of the networking system.