The capped deployment lets users lock real BTC directly on Bitcoin and borrow USDC on EVM chains without wrapping or bridging their Bitcoin.
GEORGE TOWN, Cayman Islands — September 23, 2026 — Zest Protocol, the firm operating Bitcoin’s largest DeFi lending market on Stacks, has launched a capped mainnet demonstration of its Bitcoin Collateral Vaults. The deployment allows users to deposit real BTC into a self-custodial vault on Bitcoin and borrow real USDC against it without wrapping or bridging their Bitcoin.
The mainnet demo marks the first full public deployment of Zest Protocol’s native-Bitcoin collateral vault infrastructure. Users can deposit BTC into an individual vault, keep their coins on Bitcoin, and use them as collateral to access stablecoin liquidity.
Bitcoin Collateral Vaults are self-custodial vaults on Bitcoin L1, secured by Bitcoin’s own rules and designed around BitVM proof verification. Unlike traditional DeFi lending models that require users to wrap BTC into assets such as wBTC or move it through a bridge to another blockchain, Zest Protocol keeps the underlying BTC on Bitcoin.
Each vault holds the BTC of a single user rather than pooling funds with other depositors. Proofs of the vault’s state can be verified on EVM chains, where users can borrow stablecoins against their Bitcoin. Repayment and liquidation activity on the destination chain then determines what happens to the corresponding BTC on Bitcoin.
In the capped mainnet demo, users can test the complete borrowing process with real BTC and real USDC, subject to per-wallet limits while the system is tested under real-world conditions.
Watch the Bitcoin Collateral Vault process in action: Here
Tycho Onnasch, Founder of Zest Protocol, said:
“We’ve spent five years on programmable Bitcoin, first on Stacks and now on Bitcoin itself. Today you can put real BTC in a vault on Bitcoin and borrow against it on mainnet. That’s why Zest Protocol exists: turning Bitcoin from an idle asset into productive capital. We’re very excited to put this in people’s hands.”
The mainnet demo also incorporates lessons from more than two years of operating the Zest Protocol Stacks Market, which the company describes as the largest lending market on Bitcoin L2s. The market reached more than $100 million in peak TVL, with zero reported bad debt and no BTC lost.
Bitcoin Collateral Vaults support partial liquidations rather than relying on an all-or-nothing approach. Users can also make partial withdrawals, while each vault remains controlled by a single standard Bitcoin key. This allows users to manage their collateral without having to deal with additional custody arrangements.
Tim Draper, Founder of Draper Associates, said:
“I backed Zest Protocol because this team has been building on Bitcoin longer than almost anyone, and they know how to ship great products with amazing user experience. Seeing real Bitcoin collateral working on mainnet, with the coins never leaving Bitcoin, is something I’m incredibly excited about.”
Zest Protocol was founded by core contributors to the Stacks blockchain, including co-architects of the sBTC and Nakamoto upgrades. The team has received backing from investors including Draper Associates, led by Tim Draper, YZi Labs, Trust Machines, Flow Traders, and Asymmetric.
The protocol’s native token, ZEST, launched in May 2026 through Binance Alpha and is currently traded on major exchanges including KuCoin, Gate, MEXC, and HTX.
The demonstration runs on mainnet using real BTC and real USDC, with borrowing caps applied on a per-wallet basis. Users can test the full flow at a limited scale by depositing BTC into an individual Bitcoin Collateral Vault and borrowing USDC on Ethereum.
Each vault holds the BTC of a single user, keeping the coins separate from other users’ collateral. When the loan is repaid, the same BTC can be returned to the user according to the protocol’s rules.
The caps will remain in place while Zest Protocol completes additional external audits and testing. Following that process, the company plans to move toward a broader production launch, with institutional partner activations expected as the platform expands.
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With over half a decade of experience commentating on the cryptocurrency market and even more as a trader and investor, Jay has developed a robust knowledge base that enables him to dive deep into the inner workings of crypto platforms and the broader market to deliver unique, user-focused insight.
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