Layer-1 blockchain Sui is set to launch Hashi, a new institutional network that allows holders to use bitcoin as collateral for lending without moving it off the Bitcoin ledger. The mainnet is slated to roll out in phases later this month.

The system is debuting with $500 million in capital commitments from a coalition of more than 20 industry partners. While these are commitments rather than immediate deposits, the pre-pledged capital is designed to ensure markets open with deep liquidity when the system goes live, instead of starting empty — a hurdle for new DeFi markets, where lenders and borrowers each wait for the other side to arrive. Because the backing is pledged rather than deposited, the phased rollout will show how much of the $500 million materializes as live market liquidity.

"Hashi is launching with serious capital and a coalition of industry leaders because institutions want to put Bitcoin to work without giving up the protections they require," Adeniyi Abiodun, co-founder and chief product officer of Mysten Labs, the original creator of Sui, said in an official announcement.

The primary target for this capital is a vast pool of dormant wealth. Sui estimates that roughly $1 trillion worth of bitcoin is currently sitting idle. Until now, institutional and corporate balance-sheet holders have lacked a compliant, transparent ecosystem to safely deploy their native bitcoin in decentralized finance (DeFi).

The launch comes amid a broader shift in bitcoin-backed finance, in which borrowing is moving well beyond speculative crypto trading. Bitcoin holders now use bitcoin-collateralized loans to cover real-world expenses such as university tuition, real estate acquisitions and corporate working capital.

"Public companies and institutions hold enormous amounts of Bitcoin, but their ability to use that capital has been constrained by the technology available to them," said Nathan McCauley, CEO and co-founder of Anchorage Digital, a day-one launch partner that also plans to supply stablecoin liquidity to the network. "Connecting our institutional clients with Hashi represents a complete paradigm shift," McCauley added.

How Hashi Works

The system is designed to overcome these institutional constraints. Instead of bridging across blockchains, users securely lock their BTC in a vault address directly on the Bitcoin blockchain. A 2-of-2 multisig secures this address, requiring cryptographic sign-off from both of Hashi's validators, meaning neither party can move the collateral alone. A separate, independent guardian layer is built to monitor and slow suspicious collateral movements.

While the underlying bitcoin stays locked on the Bitcoin network, Hashi mints hBTC, a digital voucher token on Sui backed directly by that deposit. This is where the lending activity begins: applications on Sui can use these hBTC vouchers to power lending, borrowing, credit markets and real-world asset trading.

When a user wants to exit, the hBTC voucher is permanently burned on Sui, which triggers the multisig to safely unlock and release the original bitcoin back to the user on the Bitcoin network.

Institutional-Grade Security Reviews

To meet strict institutional compliance and security standards, Hashi has undergone third-party vetting. Security firm Certora formally verified Hashi's smart contracts, while another firm, CommonPrefix, reviewed the cryptography of its multi-party computation (MPC) protocol.

Bitcoin (BTC) was last trading at $82,800.62 at the time of publication, according to CoinDesk pricing data.