Zest Protocol Puts Native Bitcoin in Play for Ethereum Lending
Zest Protocol has launched a mainnet demo for its Bitcoin Collateral Vaults, allowing users to borrow USDC on Ethereum while keeping their native BTC on Bitcoin.
The system uses self-custodial Taproot vaults on Bitcoin, where a user deposits native BTC and a corresponding collateral record is represented on Ethereum. The USDC borrowing side of the position is handled by Ethereum smart contracts, with no need to wrap or bridge the BTC onto another chain.
Zest is testing this system under controlled conditions, capping collateral at 0.001 BTC per wallet during the demo phase. This is not yet the unrestricted production launch, but it marks a significant step towards making native Bitcoin usable as collateral in other blockchain's lending markets without compromising its security or control.