Innovative Stablecoin Protocol on Blast: Zest

With the launch of a certain testnet and the introduction of a developer incentive program, the ecosystem faces the challenge of optimizing capital liquidity. In traditional stablecoin models, users need to over-collateralize to obtain stablecoins, which presents a significant issue with capital efficiency. Against this backdrop, how to better utilize the vast on-chain liquidity has become a key question that cryptocurrency development teams must consider.

The Zest protocol was born, proposing an innovative solution. Unlike other public chains, the ample liquidity on a certain public chain presents a new proposition for developers: how to maximize capital efficiency? In short, it is about how to help users leverage more effectively.

The core concept of Zest is to separate yield from volatility, achieving 100% capital utilization efficiency for stablecoins. A major innovation of this public chain is that all ETH on the network has native yield, which provides ample operational space for the protocol layer.

In the Zest protocol, users can stake $150 worth of a certain public chain ETH to receive $100 of zUSD and $50 of leveraged certain public chain ETH. This mechanism can be represented by the following formula:

1 * a public chain ETH = k * zUSD + 1 * lBETH_k

Among them, the k value represents different risk preferences, and the protocol will introduce diversified k values to meet the needs of different users.

This design can meet the needs of two types of users at the same time:

1. Risk-averse users pursuing stable returns: zUSD provides risk-free leveraged returns because all fluctuations of a certain public chain ETH are leveraged by a certain public chain ETH.

2. Users pursuing high leverage: Leveraging a certain public chain ETH can achieve significant gains when the price of ETH rises.

For example, assuming k=1000, if the price of ETH rises from $1800 to $3000, and the annualized yield of the public chain ETH is 4.5%, then the annualized yield of zUSD staking can reach 27%, which is six times the native yield.

For leveraged users, if the price of ETH rises from 1300 dollars to 3000 dollars, the leveraged value of a certain public chain ETH will increase from 300 dollars to 2000 dollars, achieving nearly 7 times the return.

The design of the Zest protocol fully leverages the abundant liquidity characteristics of a certain public chain, allowing for greater focus on optimizing product mechanisms and economic models, achieving higher leverage and capital utilization efficiency. This innovative design provides users with more choices and brings new possibilities to the entire ecosystem.

It is worth noting that the token economic model of Zest has not yet been revealed, which will be one of the key points of focus in the future. As the project further develops, we look forward to seeing more details and potential innovations.