Zest Protocol launches Bitcoin collateral vaults demo on mainnet, enabling users to deposit BTC into Taproot vaults and borrow USDC from Ethereum liquidity.
DeFi & Yields ·
Zest Protocol has launched a demo of its Bitcoin collateral vaults on mainnet, allowing users to deposit Bitcoin into personal Taproot vaults on Bitcoin's base layer while borrowing USDC against that collateral from Ethereum liquidity sources. The mechanism bridges two separate blockchains, enabling Bitcoin holders to access dollar-denominated credit without moving their BTC off-chain.
The architecture separates custody and lending: users retain control of their Bitcoin in self-custody Taproot vaults on Bitcoin Layer 1, while the protocol taps Ethereum-based liquidity pools to issue USDC loans. This cross-chain design avoids wrapping or custodial intermediaries for the Bitcoin side of the transaction. The demo phase indicates the protocol is testing core mechanics before wider availability.
Details on loan terms, collateralization ratios, liquidation triggers, and fee structures remain unspecified in available materials. The scope and duration of the mainnet demo, as well as any restrictions on participant access, have not been disclosed.