Zest Protocol Sets October 23 Deadline for aeUSDC Exit on Stacks Market V1

Zest Protocol is drawing a hard line under its legacy infrastructure. The Bitcoin-layer DeFi protocol has set October 23 as the final date for users to exit aeUSDC positions on Stacks Market V1, marking the end of a migration window that has been reshaping how liquidity works on the Stacks blockchain.

The deadline is the capstone of a broader deprecation effort, with the minting of aeUSDC already disabled and support for the Classic Allbridge bridge ceasing alongside it.

The one-transaction migration tool Zest built for the V1-to-V2 move is elegant in practice: most positions migrate automatically through the Zest app in a single action. aeUSDC is the exception.

That exclusion is structural, not an oversight. aeUSDC is a legacy bridged USDC variant that dates to around 2023, and Stacks Market V2 operates on USDCx, a stablecoin tied to a partnership with Circle directly. The two assets are not interchangeable at the protocol level, so no automated path exists between them.

For users still holding aeUSDC, the process involves three steps done manually: withdraw from V1, convert to USDCx by either swapping on Bitflow or bridging through Allbridge Classic, then deposit the USDCx into V2. Zest has also reduced borrow caps on V1 specifically to make the old market less attractive, nudging users toward V2 rather than waiting for a forced exit.

The V2 architecture introduces pair-specific risk groups, which allow the protocol to manage collateral risk at the asset-pair level rather than applying blanket parameters across the board. V2 also introduces partial liquidations, which replace the binary all-or-nothing liquidation model common in earlier DeFi lending markets. Users also gain the option to opt out of rehypothecation, meaning deposited collateral can be kept non-redeployable if a user prefers that their assets not be lent out further.

Stacks Market V2 had reached a total value locked of approximately $87 million by early October, with utilization rates running high across its major assets: around 70% for sBTC, 75% for STX, and 72% for USDCx based on mid-month snapshots.

USDCx, backed by Circle’s issuance infrastructure, sidesteps the counterparty risk associated with bridged stablecoins. Bitflow handles the swap path for users converting aeUSDC, and Allbridge Classic remains available as a bridging option during the transition window. Once October 23 passes, the practical infrastructure supporting aeUSDC positions begins to wind down in earnest.