Zest Protocol's Bitcoin Collateral Vaults Demo Now Live
Zest Protocol has launched a mainnet demo that allows users to borrow USDC on Ethereum using native Bitcoin as collateral, without moving or wrapping their BTC.
The system uses self-custodial Taproot vaults on Bitcoin, where users deposit native BTC and create corresponding collateral records on Ethereum. The USDC borrowing is handled by Ethereum smart contracts.
The key feature of this system is that the Bitcoin itself never leaves its home chain. Zest says every permitted destination for the BTC is signed by the depositor when the vault is created, preventing an operator from later redirecting the collateral somewhere else.
The mainnet demo currently has a cap of 0.001 BTC per wallet and is not yet available for unrestricted use. This is a controlled test phase to ensure the system works as intended before opening it more broadly.