Bitcoin may be the talk of the town, but only a fraction of the $1.4 trillion it represents is actually being used in a productive way. Much of that value simply sits idle in cold storage, largely because Bitcoin's own chain has limited smart-contract capability, so putting BTC to work in DeFi has historically required moving or re-issuing it on another network. Hashi, a Bitcoin finance primitive native to the Sui blockchain and developed by Mysten Labs, aims to change that by making BTC usable as programmable collateral without moving it off its native chain.

The Significance of Native Collateral

Unlike wBTC and other synthetic wrappers, Hashi does not re-mint BTC. Wrapped tokens typically depend on a centralized custodian holding the underlying Bitcoin and issuing a matching token on another chain — a model that has drawn recurring criticism over custodial concentration and has pushed builders toward more trust-minimized designs such as tBTC. Hashi takes a different route: deposited assets are secured with a 2-of-2 multisig that requires a signature from an MPC validator and a separate signature from a Guardian Layer, an independent component that can delay or prevent a withdrawal if it appears suspicious. Because both signatures are required, funds cannot be moved by either party alone — and the underlying Bitcoin stays on its own chain even as it is put to work on Sui.

Sui's announcement framed the launch:

Bitcoin is back in every timeline, but it is still sitting idle in cold storage. Hashi makes native $BTC programmable collateral on Sui, while the Bitcoin stays on its own chain. 2M+ deposits on testnet. Mainnet next.

— Sui (@SuiNetwork), August 22, 2026 — x.com/SuiNetwork/status/2091164487999189211

On the Sui side, loan terms and collateral positions are managed via Move smart contracts. Move was originally developed at Meta for the Diem payments project, and Mysten Labs was founded by engineers from that team; on Sui, the language's resource model represents assets as discrete objects that can be locked, transferred, or posted as collateral. According to a legal analysis performed by Fenwick West and referred to by Sui, deposits and redemptions are structured so that taxable events — a major problem for institutions under U.S. law — can be avoided.

Testnet Traction and Institutional Coalition

Hashi's devnet launched in March, and the global testnet went live on July 22, reporting more than 2 million test deposits. Over 25 partners are currently testing the system, including BitGo, Cumberland, FalconX, Bullish, SwissBorg, Fluid, Ledger, and Blockdaemon — a roster that spans custody providers (BitGo, Ledger), market makers and liquidity desks (Cumberland, FalconX), trading platforms (Bullish, SwissBorg), and node and staking infrastructure (Blockdaemon).

The model focuses on BTC-backed lending and stablecoin issuance, with yield generated from interest spreads rather than token inflation — a contrast to the liquidity-mining incentives that drove much of the earlier DeFi lending boom.

What Comes Next for BTCfi

Mainnet is the next milestone. If the Guardian Layer holds under adversarial testing, Hashi could become foundational plumbing for Sui DeFi protocols such as Scallop, Navi, and Suilend, connecting Bitcoin liquidity to onchain credit markets. It enters a busy BTCfi field in which Bitcoin staking protocols such as Babylon and a wave of Bitcoin Layer 2s are also working to activate idle BTC. Risks remain around MPC security, oracle dependency via CF Benchmarks, and regulatory clarity, but the primitive offers a credible path to putting Bitcoin collateral to productive use.

Source: Binance