Foreword

As Blast announces that the testnet is online and 50% of the shorts are distributed to developers, the ecosystem will inevitably face the problem of optimizing capital liquidity. In the existing stablecoin case, at a typical 150% collateralization rate, users require more than $150 worth of collateral to purchase $100 of stablecoins, leaving $50 underutilized. This model represents a severe inefficiency.

How to better attract and utilize the current liquidity of more than one billion US dollars on the blast chain has become a question that all ambitious development teams in the crypto world must think about, and Zest has given them solution.

Introduction to Zest

What is different from other chains , the sufficient liquidity on Blast gives developers a new proposition - "how to maximize capital efficiency", or to simplify it a bit, how to help users better leverage.

In response to this proposition, zest’s answer is to decompose the rate of return and volatility to achieve a stable currency with 100% capital utilization efficiency.

Project Core Mechanism

One ​​of Blast’s innovative designs That is, all ETH on the Blast network has native income, and on top of this, the protocol layer can perform various operations, such as LSDFi.

When a user pledges Blast_ETH worth $150 in Zest, he or she can obtain zUSD worth $100 and Leveraged Blast_ETH worth $50. The yield of Blast_ETH is inherited by zUSD, and the volatility is inherited by Leveraged Blast_ETH. The specific process can be described by the following formula

$$1*BlastETH=k*zUSD+1*lBETHk$$

In the above formula, 1 Blast_ETH can mint k zUSD and 1 lBETH_k. When the ETH price fell to $k, lBETH_k faced liquidation. After going online, taking into account the risk preferences of different users, the protocol will introduce diversified k values.

By decomposing volatility and yield, the Zest protocol can meet the needs of both types of users

1. Risk-averse, pursuing farming income users

Due to All fluctuations in Blast_ETH are absorbed by Leveraged Blast_ETH, and zUSD has risk-free leverage returns.

Suppose K=1000, the ETH price rises from 1800 to 3000, and the APR of Blast_ETH is 4.5%, then there is zUSD Stake APR=(3000*4.5%)/(1000*0.5)=< strong>27%, Six times the native APR(27%/4.5%)

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LeverageUser

Similarly assume that the price of ETH rises from 1300 to 3000, K=1000, then the value of IBETH will increase from (1300-1000) to (3000-1000), achieving a gain of nearly 7 times.

On the token side, Zest has not yet launched a specific design, and this part is left for subsequent discussion.

Summary

Due to the particularity of Blast’s abundant liquidity , the above agreement can better focus on its own product mechanism and economic model design to achieve higher leverage and higher capital utilization efficiency. So we can see more excellent designs on it.

? As Blast introduces a large number of yield-bearing assets, where should these assets go?

Old, uninspired DeFi projects may lack innovative solutions, but Zest is here to provide < /em>entirely new and original answers.

• Risk-averse or yield-loving users can obtain stablecoins with leverage yield.

• Degen or leverage-loving users can access long-term on-chain leveraged derivatives

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