Zest Protocol loans jump 132% to $14.75M in Q3
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Zest Protocol's loan surge highlights the volatility and adaptive strategies in DeFi, emphasizing the need for robust risk management practices.
The Bitcoin lending protocol on Stacks grew mostly through net new borrowing, then hit a record above $40 million before pulling back
Mon 9 Nov 2026 · 09:27 EST · 2 min read
In Crypto
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Zest Protocol, a Bitcoin lending platform built on Stacks, posted a 132% increase in loans on its Stacks V2 market during the third quarter of 2026. Outstanding loans reached $14.75 million by quarter’s end.
An on-chain analysis by Alea Research breaks down the quarter’s numbers. Approximately $6.20 million of the increase came from net new borrowing. Another $2.18 million came from higher token prices.
Activity kept climbing after the quarter closed. In early October, borrows on the Stacks market passed an all-time high above $40 million.
That peak did not hold. By early November 2026, active loans had settled at approximately $25 million, with total value locked (TVL) around $46.6 million.
The TVL path has been bumpy. The Stacks market’s TVL reached $87.28 million by early October 2026, an 18.2% gain from September, before falling back to the November level.
On revenue, the protocol’s cumulative fees passed $540,000 as of early November 2026.
Vaults, liquidations, and a pause
On September 23, 2026, Zest launched a mainnet demo of its Bitcoin Collateral Vaults. The vaults let users deposit native BTC into self-custodial vaults and borrow USDC on Ethereum. There is no wrapping or bridging involved.
By early November, users had opened 135 vaults.
Since its Stacks market went live in March 2024, Zest has processed more than 1,500 liquidations, with zero bad debt.
On October 30, 2026, it paused new lending, citing external market conditions, specifically a security incident involving Binance.
How Zest got here
Zest Protocol was founded in 2023 out of work at Trust Machines. It was built as a Bitcoin lending platform on Stacks, a network designed to bring smart contract functionality to Bitcoin-backed assets.
The Stacks market launched in March 2024. Its V2 upgrade arrived in early 2026 and introduced risk groups, a mechanism aimed at improving capital efficiency while keeping risk in check.
What this means for Bitcoin lending
The post-peak numbers deserve attention. Borrows fell from above $40 million to approximately $25 million, and TVL slid from $87.28 million to around $46.6 million within roughly a month.
Alea Research also frames moves like this pause as part of a wider pattern of DeFi protocols protecting themselves from external shocks.
With cumulative fees above $540,000, the revenue base remains small next to the larger names in DeFi lending.
Disclosure: This article was edited by John Chen. For more information on how we create and review content, see our Editorial Policy.
