Zest Protocol announced the rollout of a limited mainnet demo for its Bitcoin Collateral Vaults. Through this infrastructure, Bitcoin holders can deposit native BTC directly onto Layer 1 and borrow the USDC stablecoin on the Ethereum network without relying on bridges or wrapped versions like wBTC.
This breakthrough addresses one of the primary constraints in the BTCFi ecosystem: counterparty risk tied to centralized custodians. By keeping funds isolated in individual vaults governed by Bitcoin’s own consensus rules and designed for verification via BitVM proofs, users retain sovereign custody of their assets while unlocking cross-chain liquidity across decentralized finance (DeFi).
Currently, the environment operates with a collateral cap per wallet to validate system stability at small scale. Upon completing ongoing external security audits, the team plans to deploy the final production version and enable large-scale institutional integrations.
Source: https://www.zestprotocol.com/blog/bitcoin-collateral-vaults-mainnet-demo-is-live
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