Bitcoin Collateral Vaults are on mainnet
On 23 September the Bitcoin Collateral Vaults mainnet demo went live. Anyone can deposit native BTC into a self-custodial vault on Bitcoin L1 and borrow USDC on Ethereum against it. The BTC never leaves Bitcoin. No wrapping, no bridging.
The demo runs with a capped collateral position per wallet so the community can use the real system while it scales. Almost 100 vaults have been opened since launch.
Positions are divisible. Borrowers top up or withdraw collateral in partial amounts, and a liquidation takes only the collateral the debt requires. With zero debt outstanding, a depositor reclaims their BTC with an ordinary Bitcoin key.
The launch hit hard
The announcement trended on X. WallStreetBets quote-tweeted it to two million followers, Tim Draper backed it publicly, and Charles Hoskinson showed up in the replies. DeSpread published a research report on Zest Protocol in English and Korean.
The capital layer for Bitcoin
The launch came with a new identity and a retired framing. Zest Protocol is no longer described as a lending protocol. Zest Protocol is the capital layer for Bitcoin: BTC stays on Bitcoin while its value works wherever DeFi activity already exists.
Bitcoin Collateral Vaults are the first application of that infrastructure. Borrowing is the first use, not the limit. The new site is live at zestprotocol.com.
Zest Protocol Stacks Market
$87.28M TVL and borrows more than doubled.
The Zest Protocol Stacks Market grew from $73.86M at the start of September to $87.28M at the start of October, an increase of 18.2%. Total borrows went from $6.70M to $14.99M over the same window.
Two drivers. The Levered Bitcoin Staking Vault borrows sBTC against @StackingDAO's stBTC and created the first organic sBTC borrow demand on the market: sBTC borrowed rose from 2.09 to 73.51 sBTC. And @StacksEndowment incentives started on 11 September, paying 152,000 STX a month to sBTC suppliers and USDCx borrowers. USDCx borrowed went from 4.71M to 7.22M.
Bitcoin-denominated collateral grew. sBTC supplied fell from 722.43 to 668.8, but 133.95 stBTC is now supplied on top, bringing BTC-denominated assets on the market to 802.75, up from 722.43.
Levered Bitcoin Staking Vault
Bitcoin Staking went live on @Stacks on 10 September. The Levered Bitcoin Staking Vault, built on the Zest Protocol Stacks Market and separate from Bitcoin Collateral Vaults, filled its 20 BTC first allocation and looped it into roughly 92 stBTC inside the first bond, about 60% of all stBTC.
Deposit stBTC, borrow sBTC against it, stake the borrowed sBTC into more stBTC, repeat. The vault returned around 6% BTC-on-BTC in its first bond, against about 2.4% for plain stBTC. Bond 2 opens this week and the Levered Bitcoin Staking Vault reopens alongside it with 100 BTC of capacity.
Zest Protocol Swap
The Zest Protocol Swap aggregator on Stacks passed $2M in cumulative volume and 2,100 swaps since launch, with weekly volume still growing.
Both sides of the capital layer are live
September showed the thesis working in two places at once. On Bitcoin L1, native BTC now backs credit on Ethereum without leaving Bitcoin. On Stacks, the first Bitcoin Staking bond turned staked BTC into collateral and more than doubled borrows on the largest BTC lending market on any Bitcoin L2.
Zest Protocol hosted multiple events at Korea Blockchain Week to connect with our Korean community. We appreciate your support over the years and look forward to expanding on existing collaborations.
Onwards into October. The month starts strong in Singapore 💪
Best,
The Zest Protocol team
