Wrapped Bitcoin yield products require the user to wrap Bitcoin before participating in yield bearing activity. The Bitcoin is held by a custodian or a collection of network nodes for the full duration of yield bearing activity, which introduces custody risk. Most Bitcoin holders rightly deem this custody risk to be too high for them to start earning yield on their Bitcoin. At the same time, wrapping Bitcoin may be considered a taxable event in some jurisdictions. With Zest Protocol on the other hand, users don’t have to wrap any Bitcoin. While incoming Bitcoin is swapped for wrapped Bitcoin (xBTC) by the protocol, this wrapped Bitcoin is swapped again to real BTC once a borrower takes out borrowed BTC funds. Zest’s technical design limits custody risk only to the moment when BTC is escrowed in a pool in the form of xBTC waiting to be borrowed. Pool delegates are incentivised to keep the amount of xBTC in their pools as low as possible: the longer the xBTC sits idle, the lower the yield in their pool will be. Based on analysis of lending protocols with a similar design to Zest and strong borrowing demand, we expect a utilisation rate of 90-95% of Zest’s TVL - leading to only a 5-10% of BTC funds to be held in escrow as xBTC at any given time. As a result, Zest Protocol reduces wrapping risk over the funds it manages.