Bitcoin lending startup Zest Protocol secured $3.5 million in a funding round led by venture capitalist Tim Draper, Reuters reported. The investment, joined by notable backers including Binance Labs and Flow Traders, signals growing confidence in the crypto lending industry despite regulatory scrutiny.
Bitcoin Lending Innovation
Unlike traditional lending platforms, the six-employee startup operates a decentralized model that facilitates peer-to-peer transactions without intermediaries. Zest Protocol aims to disrupt the Bitcoin lending landscape by enabling users to lend out their Bitcoins or borrow against them. This approach allows them to earn passive income.
Zest's Founder, Tycho Onnasch, emphasized the platform's divergence from regulatory targets amid a crackdown by the USSecurities and Exchange Commission. The company plans to expand its offerings with the raised funds, aiming for a broader rollout later this year. Onnasch underscored the company's conservative approach to yield generation, signaling a departure from the high-yield offerings prevalent in the early days of crypto.
Draper, known for his early investments in tech ventures like SpaceX, Tesla, and Coinbase, is optimistic about the adoption of Bitcoin. His support highlights the emergence of the top cryptocurrency as an institutional asset and the growing ecosystem surrounding it.
Bitcoin Developments
Last month, Bitcoin underwent halving, an event that occurred at block number 840,000. Following the much-anticipated event block mining reward was halved to 3.125 Bitcoins from the previous 6.25 Bitcoins. This reduction has far-reaching implications for miners, investors, and the overall Bitcoin ecosystem.
Halving is important in Bitcoin's lifecycle and occurs roughly every four years or after every 210,000 blocks. This mechanism controls inflation by reducing the Bitcoin supply. The journey began with the inception of Bitcoin in 2009 when miners received a generous reward of 50 Bitcoins per block. Since then, halving events have steadily decreased this reward, with previous halvings occurring in 2012 and 2016.
Bitcoin's protocol dictates that halving must continue until the maximum supply of 21 million Bitcoins is reached. Currently, around 19 million Bitcoins have been mined, leaving only 2 million more to be discovered. Any attempt to alter this predetermined algorithm would require a consensus among Bitcoin miners, a feat that's nearly impossible given the decentralized nature of the network.
This article was written by Jared Kirui at www.financemagnates.com.
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