Key Highlights
- Sui launches Hashi to bring Bitcoin liquidity into DeFi through lending, borrowing, and yield strategies.
- Institutional players like BitGo and FalconX back the ecosystem with custody, liquidity, and infrastructure support.
- Hashi integrates credit markets, insurance, and transparent collateral management to address institutional adoption barriers in Bitcoin DeFi.
Sui, a Layer-1 blockchain, has introduced Hashi, a new infrastructure layer aimed at bringing more Bitcoin liquidity into decentralized finance.
According to the official announcement, the move targets a longstanding gap: despite Bitcoin’s scale, only a small fraction of its supply is currently used in DeFi applications.
Hashi is designed to enable Bitcoin holders, both institutional and retail, to deploy their assets in lending, borrowing, and yield-generating strategies without exiting their positions.
Institutional backing from day one
The project launches with participation from several major industry players, including BitGo, Bullish, FalconX, and Ledger. These firms are expected to contribute liquidity, custody, and infrastructure support, positioning Hashi as an institutional-facing entry point into Bitcoin-based DeFi.
Additional ecosystem partners span custody, data, and security layers, reflecting a coordinated effort to address concerns that have historically limited institutional participation, particularly around transparency and collateral management.
Lending and credit markets at the core
At launch, lending is expected to be the primary use case. Bitcoin holders will be able to use their BTC as collateral to borrow stablecoins or extend loans, with smart contracts handling collateral management and execution.
Hashi also introduces mechanisms for credit origination, allowing users to access liquidity without selling their Bitcoin. This structure is intended to appeal to long-term holders seeking capital efficiency while maintaining exposure to BTC.
Cross-chain infrastructure and transparency focus
Unlike earlier approaches that rely heavily on wrapped assets, Hashi uses a smart contract-based system to manage Bitcoin across chains. The setup links Bitcoin addresses with onchain activity, enabling visibility into collateral positions, loan health, and transaction flows.
Infrastructure providers such as CF Benchmarks and Cubist support pricing data and asset movement, while audit firms, including Certora, are involved in verification.
Risk management and insurance layer
To address institutional risk requirements, Hashi integrates insurance coverage through Soter Insure. Policies are denominated in Bitcoin, allowing claims and premiums to be settled in the same asset used as collateral.
This structure is intended to reduce asset-liability mismatches and provide an additional safeguard for participants deploying large amounts of capital.
Expanding use cases beyond lending
Beyond credit markets, Hashi is positioned as a base layer for additional financial products. Asset managers and protocols are expected to build structured products, automated vaults, and tokenized instruments on top of the system.
Plans also include Bitcoin-backed bond issuance, with firms like Wave Digital exploring ways to use the infrastructure for capital raising tied to BTC collateral.
A broader bet on Bitcoin DeFi growth
Hashi reflects a broader effort to extend Bitcoin’s role beyond a passive store of value. By combining custody, lending, and compliance-focused infrastructure, the project aims to make BTC more usable within onchain financial systems.
Whether it succeeds will depend on adoption from institutions and the ability to address long-standing concerns around security, transparency, and liquidity in Bitcoin-based DeFi markets.
Also Read: Polygon and Apex Build “Compliance-First” Blockchain for Institutions
