Zest Protocol, the firm operating Bitcoin’s (BTC) largest DeFi lending market on Stacks, has announced a capped mainnet demo for its Bitcoin Collateral Vault.
The public demo marks the first full public-mainnet deployment of Zest’s native-Bitcoin collateral vault infrastructure, which consists of self-custodial vaults on Bitcoin L1, enforced by the “digital gold’s” own rules and built for Bitcoin Virtual Machine (BitVM) proof verification, as disclosed to Finbold on Wednesday, September 23.
As such, the demo allows users to deposit real Bitcoin into a self-custodial vault on Bitcoin L1 and borrow real USD Coin (USDC) against it, without wrapping or bridging.
“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,” Tycho Onnasch, Founder of Zest Protocol, told Finbold in a press release.
Bitcoin borrowing on Zest
Unlike decentralized finance (DeFi) approaches, under which users need to wrap BTC into a token such as wBTC or bridge it to another chain, Zest Protocol keeps BTC on its native chain and in the user’s own vault.
Proofs of the vault’s state are transmitted to Ethereum Virtual Machine (EVM) chains, where users can borrow stablecoins against their BTC. Proofs of repayment or liquidation on the destination chain then determine what happens to the BTC on Bitcoin.
$100 million peak TVL
Zest said its existing Stacks lending market previously reached more than $100 million in peak total value locked, with no bad debt or BTC losses. The company said the mainnet demo will remain capped per wallet until external audits are completed, after which it plans a broader production rollout with institutional partners.
“Seeing real Bitcoin collateral working on mainnet, with the coins never leaving Bitcoin, is something I’m incredibly excited about,” Tim Draper, Founder of Draper Associates, added.
With Zest’s Bitcoin Collateral Vault, borrowers get partial liquidations, partial withdrawals, and a vault controlled by one ordinary Bitcoin key, with no need to manage anything else.
Featured image via Shutterstock
