Hermetica (USDh) Partners with Zest Protocol to Power Loan Liquidations on the Stacks Network

This advancement is a remarkable step forward to power Bitcoin-native decentralized finance (DeFi), leveraging the minting process of USDh.

DeFi protocol Zest Protocol has partnered with stablecoin issuer Hermetica to fuel loan liquidations on the Stacks network with USDh.

This development will enable Zest Protocol to scale its cBTC loan offering and provide up to 25% APY to the USDh holders.

Hermetica Is Issuer of Bitcoin-Backed Stablecoin USDh

Founded in 2023, Hermetica is the issuer of Bitcon-backed stablecoin USDh, a stablecoin that is pegged to the price of $BTC and serves as the most liquid stablecoin on the Stacks blockchain.

The other ally, Zest Protocol, is a DeFi protocol that is specifically focused on Bitcoin and provides a trustless lending market for cBTC and sBTC, accumulating over $16 million in total value locked (TVL).

This partnership will allow Zest Protocol to diversify its lending offering and provide users with more options.

The integration of USDh into Zest Protocol's liquidation system will enhance the capital efficiency of the ecosystem and enable the protocol to scale its operations more effectively.

This move comes as part of Hermetica's broader initiative to bridge liquidity from CeFi to DeFi.

The protocol has already facilitated the transfer of over $1 million in USDh liquidity to Zest Protocol, which will increase the borrowing capacity of the protocol by 300%.

"USDh is the first and only stablecoin designed to provide liquidity to Bitcoin-native DeFi. By powering Zest's liquidations with USDh, we're enabling scalable growth of sBTC-backed loans and establishing USDh as the core liquidity layer for Bitcoin-native finance," said Jakob Schillinger, CEO of Hermetica.

"We are excited to partner with Hermetica to bring this integration to market," added Tycho Onnasch, CEO of Zest Protocol.

"With native sBTC-to-USDh minting on the Stacks chain, we can now handle liquidations more easily and scale our cBTC loan offering."

The partnership between Hermetica and Zest Protocol is a testament to the growing strength and potential of the Bitcoin DeFi ecosystem.

As protocols continue to innovate and collaborate, the DeFi ecosystem on Bitcoin is poised for tremendous growth and expansion in the coming year.