Zest Bets Bitcoin Can Back Loans Without Ever Leaving Its Own Chain

Bitcoin is the largest crypto asset by market value, yet almost all of it sits still. Spark's research counted 91,332 BTC across Bitcoin layer-2 networks in May 2026, or about 0.46% of the circulating supply. Adding every wrapped token and all Babylon staking lifts the share to only about 0.8%.

Most holders who do put BTC to work wrap it first. A custodian keeps the real coins, and a token such as WBTC stands in for them on Ethereum (ETH). Any loan taken against that token then depends on the custodian and its redemption system staying sound.

WBTC holders were reminded of that dependency in August 2024. BitGo said it would shift custody of WBTC to a joint venture with Justin Sun-linked BiT Global.

Aave's Ethereum market held about $2.2 billion in supplied WBTC at the time, according to risk manager Chaos Labs. Coinbase went further and delisted WBTC in December 2024. When BiT Global sued over the decision, Coinbase's court filing cited the risk that control would "fall into the hands of Justin Sun."

Zest Protocol, which runs a Bitcoin lending market on Stacks, is testing a route that leaves the coins on Bitcoin. On September 23, it launched a capped mainnet demo of its Bitcoin Collateral Vaults. It lets holders borrow against BTC on EVM chains without wrapping it.