BTCz
Last updated
Last updated
BTCz is a yield bearing BTC on Stacks. BTCz brings the best of Stacks and Babylon together to create the most secure BTC staking pool.
By staking BTC on Zest Protocol, users receive BTCz - a tokenised representation of their staked BTC that can be used in DeFi. BTCz automatically accrues BTC yield, thereby increasing its value over time versus BTC.
As the leading Bitcoin L2, Stacks provides unique security features to BTCz. Stacks smart contracts have the unique ability to read Bitcoin state, allowing the contracts to independently verify changes to Bitcoin balances. This allows Zest Protocol’s BTC staking contract on the Stacks L2 to independently verify BTC stake on Bitcoin L1 through the Babylon staking protocol, without relying on a third party oracle or messaging system. This combined with Babylon’s trustless design lays the foundation for BTCz to be the most secure staked BTC derivative.
BTCz will progressively decentralise towards the Stacks' sBTC design to create a decentralised and permissionless peg that yields BTC. Users will also be able to deposit sBTC to earn a yield through BTCz. BTCz will be sBTC’s yield bearing cousin, driving sBTC and Stacks network adoption.
sBTC will be Stacks' flagship product. Yet apart from potentially short-term incentives, sBTC is not designed as a yield bearing BTC. This is where BTCz comes in. Users who hold idle BTC on Stacks as sBTC will be able to swap to a yield bearing version of BTC instantly.
Additionally, BTCz is an attractive product for Stacks-aligned BTC holders who want to stake their BTC in Babylon. Using BTCz, BTC holders benefit from Babylon's BTC yield while contributing to Stacks TVL.
Users earn BTC by holding BTCz. This BTC yield is generated through Babylon's BTC staking protocol, starting with Babylon points as the Babylon protocol prepares to integrate with its first Proof-of-Stake networks.
During BTCz bootstrapping, the BTC backing BTCz is held in a programmable MPC custody wallet powered by Cobo MPC (read more). After sBTC launches on Stacks, BTCz is decentralised using sBTC's permissionless design.
