Host: Alright, once more we're live from definition at token 2049 in Singapore. Of course, this is where institutions and builders in tokenized credit yield and stablecoins meet, and it is powered by Accountable. Of course, Accountable is the verification layer bringing institutional finance on chain. And joining me right now is Tyiko Onash, co-founder of Zest Protocol, which is working to turn Bitcoin into productive capital. So, Tyiko, welcome to FinTech TV.
Tyiko Onash: Thank you very much.
Host: Uh, let's start simply, kind of. What is Zest Protocol and what does it let Bitcoin holders do?
Tyiko Onash: Yeah, so we started Zest Protocol with this mission to turn Bitcoin from idle assets into productive capital, and that's actually like a, a very big, you know, mission when you think about it, right? Um, I think to, you know, create any civilization, you need to turn the, the underlying assets into, into capital, right, that can be borrowed against, that can be properly integrated in a, in a financial system, right, with Bitcoin. We have digital, uh, money, right? We have digital, digital assets, but we need to turn that into digital capital and actually be productive and, and, and serve productive use cases. So that's what we're, we're fully focused on at this protocol.
Host: Amazing. And, and you kind of describe your mission as turning Bitcoin into productive capital. This is how you coin it. But what does it mean in everyday terms for someone who's watching this or who's learning about this for the first time?
Tyiko Onash: Yeah, absolutely. So what we focus on is we, we build a solution that allows users to borrow against native Bitcoin while the Bitcoin stays locked on the Bitcoin chain under Bitcoin consensus rules. And then you can take out credits or borrow against that Bitcoin on any chain that can read the proof starting with with with EVM chains.
Host: OK, and and and Zest lets people borrow against native Bitcoin uh with no wrapping or bridging, uh, but why does that matter so much in your opinion?
Tyiko Onash: Yeah, I think, you know, to really turn, you know, Bitcoin from idle assets into productive capital, I mean, there are a few things have been tried, right? Of course, rapping is sort of 11 thing which, you know, since you moves the Bitcoin to, to another network, but we've seen that that has very limited adoption, right, maybe, you know, very low single digit. Percentages of um of of Bitcoin uh you know are are wrapped and you know most for most investors it doesn't pass the kind of you know the the the risk reward right to do it to do it that way and if we think about you know really using Bitcoin as as as as capital if we think about how other assets like gold are used as capital they stay inside a vault right they they they never move right the the gold stays put and you know the financial. ecosystem kind of revolves around that and that is what we are building with Bitcoin collateral vaults. Same principle. Bitcoin stays put while its value works elsewhere and that's what we believe can really go into double digit percentages and essentially be the means that's going to actually turn Bitcoin into productive capital, right?
Host: And Tyco, from what you're seeing right now, what needs to change for Bitcoin to become widely used as collateral in on chain credit markets?
Tyiko Onash: Yeah, so I think it, it's really about this, you know, actually creating a good risk reward for using Bitcoin as collateral and wrapping just wasn't that. And I think that's very clear from the market adoption. Um, so you know, keeping the Bitcoin native, keeping the Bitcoin under Bitcoin rules, ruled by Bitcoin, I mean you own a piece of the most, you know, decentralized computing network, most secure computing network that has ever existed in human history. You don't want to give that up, absolutely, um, and, and that's really the, yeah, that's. That's, that's really the key, right?
Host: And, and institutions kind of care deeply about custody and risk at the same time. What do they need to see before they take part here?
Tyiko Onash: Yeah, yeah, absolutely. So what we've built, um, with acorn collateral vaults for this capital layer as we. As we, as we, as we call it, is built uh actually for institutional use cases. And actually institutions already use very similar setup to this to borrow against the Bitcoin today or to use the Bitcoin as capital. It's called, you know, uh tripart, you know, uh. Lending essentially and um in the with with with these kind of arrangements they uh post Bitcoin uh with a with a custodian in a triparty account and then they they borrow against it and legal agreement from the custodian kind of governs this this this set up. Essentially, Zestor or Bitcoin collateral vaults are the same or very similar, but then with Bitcoin rules governing uh the collateral position and you know, can of course also be integrated with a legal agreement or inside. Uh, of, of custodians in the future to make those tripart, um, make that tripart lending, you know, much more scalable.
Host: Makes sense. So, uh, also let's touch upon this because you also manage Bitcoin strategy for treasury company. Uh, how should treasury companies evaluate defile lending options in your opinion?
Tyiko Onash: Yeah, so I think that, that, that gives me an interesting perspective, right? So I, um, I run Bitcoin, um, Bitcoin strategy at, uh, Treasury with capital T, emerging, uh, Bitcoin treasury company, um, um, you know, focused on the Eurozone, right? So I'm based in the Netherlands. And, um, and yeah, essentially for Bitcoin treasury companies to, to, to sort of start, you know, start allocating or to, to generate yield or to, you know, use Bitcoin as productive capital, it's very important that one, they retain title, the underlying Bitcoin, um, so wrapping is usually very much out of the question, um, and, and, and two that it meets, you know, the, the standards, um, of, of, you know. Yeah, of a public company and, um, and, and you know, most, you know, D5 solutions today don't meet that and we need something that's, you know, more Bitcoin native that stays truer to, you know, to Bitcoin rules to make that happen, right?
Host: And, and if we talk more about, uh, your panel because you're talking today and your panel looks at who wins the institutional infrastructure race, um, and that's a very important topic. Where does Bitcoin fit in this picture, in your opinion?
Tyiko Onash: Yeah, cause a lot of the institutional adoption that we're talking about today and also that talking about it at at Token 2049 probably sits around like, you know, for example, vaults, right, which is something that's talked about a lot or, you know, how is, is EVM gonna serve as this kind of Automation for finance and um and and Bitcoin is is is not not discussed there you know a lot right it's very it's very about you know EVM it's very much about like you know tokenizing assets right uh Bitcoin is not really in in in in the question there as much um um but yeah like it should be part of the the conversation right I mean Bitcoin is you know 1 to 2 trillion. Um, you know, in, in idle, mostly idle assets that can be turned into productive capital. So when looking at bringing that on chain, that's obviously a very strong source of, of, of collateral. Right.
Host: Amazing. Uh, Tyo, it's been a great pleasure having you on FinTech TV. Thank you for joining us.
Tyiko Onash: Thanks very much. Thank you.
