Zest Protocol has opened a capped mainnet demonstration of its Bitcoin Collateral Vaults, allowing users to deposit real BTC into individual self-custodial vaults on Bitcoin Layer 1 and borrow USDC on Ethereum without wrapping or moving the coins. Each vault is a Taproot output with spending paths fixed at deposit, while a collateral record on the EVM chain links the vault to a connected lending market. The design supports added collateral, excess withdrawals and partial liquidations, and includes a Bitcoin timelock-based recovery route if the destination chain permanently fails. Guardians will verify settlements during the first production phase until Zest moves toward BitVM-based verification. The launch highlights the limited use of Bitcoin in DeFi: Spark counted 91,332 BTC on Bitcoin Layer 2 networks in May 2026, or about 0.46% of circulating supply, while adding wrapped tokens and Babylon staking brought the estimated share to about 0.8%. Zest describes the project as Bitcoin's Capital Layer and plans to keep wallet caps until external audits are complete before a production launch.