Jack Paul 
Zest Protocol, a Bitcoin lending platform built on Stacks, closed the third quarter of 2026 with $14.75 million in outstanding loans. That was a 132% increase from the prior period.
Q3 loan growth
Alea Research analyzed the quarter on-chain. It found that about $6.20 million of the increase came from net new borrowing. Another $2.18 million came from higher token prices. The split matters. It shows that demand grew, but price moves also lifted the dollar value of loans.
Activity did not stop at the quarter end. In early October, borrows on the Stacks market passed an all-time high above $40 million. The peak did not hold. By early November, active loans had settled at about $25 million. Total value locked was around $46.6 million.
The TVL path was bumpy too. The Stacks market reached $87.28 million in early October, an 18.2% gain from September. It then fell back to the November level. Cumulative fees passed $540,000 as of early November. That is a small revenue base next to larger lending venues, though the protocol is still young.
Vaults and liquidations
On September 23, Zest launched a mainnet demo of its Bitcoin Collateral Vaults. The product lets 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.
The Stacks market has been live since March 2024. Since then, Zest has processed more than 1,500 liquidations with zero bad debt, according to the article. That record is worth watching as the market matures. Liquidations are normal in lending. Bad debt is the harder problem.
On October 30, Zest paused new lending. The company cited external market conditions, specifically a security incident involving Binance. The pause likely reflects caution. Alea Research framed such moves as part of a wider pattern in which lending protocols protect themselves from outside shocks.
What the pullback shows
The post-peak numbers deserve attention. Borrows fell from above $40 million to roughly $25 million in about a month. TVL slid from $87.28 million to around $46.6 million over the same stretch. Some of that drop may reflect falling token prices. Some may reflect users pulling back after the pause. The data does not separate those forces cleanly.
Zest was founded in 2023 out of work at Trust Machines. Its Stacks market launched in March 2024. The V2 upgrade arrived in early 2026 and added risk groups. Those groups aim to improve capital efficiency while keeping risk in check. For Bitcoin lending, the next test is whether Zest can rebuild activity after a volatile quarter.