Vesta Finance is a layer 2 lending protocol called based on Liquity. It offers users the ability to obtain liquidity against their collateral without paying interest. By locking up collateral, users can issue Vesta's stablecoin VST to their own Ethereum address and transfer it to any other Ethereum address. These collateralized debt positions are known as vaults.

Vesta's stablecoin tokens, known as VST, are designed to maintain a value of 1 VST = $1 USD. The system ensures that it is always over-collateralized, meaning the value of the locked Ether exceeds the value of the issued stablecoins. Users can redeem their VST tokens for the underlying collateral (minus fees) directly with the system.

VST tokens can be freely exchanged by anyone with an Ethereum address, regardless of whether they have an open vault or not. The tokens are burned when a vault's debt is repaid. The Vesta system regularly updates the price of the collateral against USD using a decentralized data feed. If a vault falls below a minimum collateralization ratio (MCR) of 110%, it is considered under-collateralized and vulnerable to liquidation.