USDh Powers Zest Liquidations to Deliver Deeper Stablecoin Liquidity on Stacks
**Hermetica’s Bitcoin-Backed Stablecoin USDh Now Powers Liquidations on Zest Protocol, Supercharging BTCfi Ecosystem on Stacks**
Hermetica, the issuer of the Bitcoin-backed stablecoin USDh, has announced a key integration with **Zest Protocol**, a lending platform built on Stacks. The integration enables **USDh to facilitate loan liquidations**, enhancing the scalability of sBTC-backed lending and accelerating the growth of Bitcoin-native decentralized finance (BTCfi).
By leveraging Hermetica’s smart contract infrastructure, Zest can now **tap into centralized exchange (CeFi) liquidity** via the USDh minting process—dramatically boosting capital efficiency across its DeFi offerings. This fusion of CeFi liquidity with Bitcoin-native DeFi infrastructure is expected to act as a catalyst for broader adoption and usage of sBTC on the Stacks blockchain.
As a result of this upgrade, **Zest has increased its borrow cap by 300%**, with over **$1 million in USDh** now available to borrowers—marking a significant milestone in the protocol’s liquidity provisioning.
> “USDh is the first and only stablecoin purpose-built to serve Bitcoin-native DeFi,” said **Jakob Schillinger**, CEO of Hermetica. “By powering Zest’s liquidations with USDh, we’re enabling the scalable expansion of sBTC-backed loans while positioning USDh as the foundational liquidity layer of BTCfi. No other stablecoin can match our infrastructure in terms of security and native Bitcoin backing.”
> **Tycho Onnasch**, CEO of Zest Protocol, echoed the sentiment, stating: “Thanks to native sBTC-to-USDh minting, we’re now able to streamline the liquidation process and significantly scale our sBTC lending. Hermetica’s infrastructure is a core primitive for real Bitcoin DeFi—perfectly aligning with our mission to build Stacks DeFi on the Bitcoin standard.”
With USDh now standing as the **largest and most liquid stablecoin on Stacks**, it plays a pivotal role in fueling the BTCfi economy. Beyond its utility in lending, **USDh holders can earn up to 25% APY** in yield—all while enjoying the stability of a dollar-denominated asset that is **fully backed by Bitcoin**.
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### About Hermetica
Hermetica is the issuer of **USDh**, the first Bitcoin-backed, yield-generating synthetic dollar operating outside the traditional fiat system. Developed by a crypto-native team with experience from Kraken and State Street, Hermetica is backed by institutional asset manager **Two Prime**. USDh is uniquely designed to bring liquidity to Bitcoin-native DeFi, backed by the hardest asset—Bitcoin—and secured on the world’s most battle-tested blockchain.
Website: [hermetica.fi](https://www.hermetica.fi/)
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### About Zest Protocol
**Zest Protocol** is a decentralized finance platform purpose-built for Bitcoin. It enables lending and borrowing using BTC as collateral, aiming to create a robust DeFi ecosystem around the Bitcoin asset. Zest recently raised a **$3.5 million Seed Round** led by **Tim Draper’s Draper Associates**, with participation from **Binance Labs, Flow Traders, Trust Machines, Asymmetric**, and others.