Key Highlights
- Sui launched the Hashi testnet to enable Bitcoin-backed lending and DeFi without moving BTC off the Bitcoin network.
- The platform introduces a Guardian Layer with a 2-of-2 multisig model to enhance collateral security and transaction monitoring.
- Major partners, including BitGo, Ledger, FalconX, and Wave Digital Assets, joined the ecosystem ahead of the planned mainnet launch.
Sui, a layer-1 blockchain, has launched the Hashi testnet, a system designed to enable the use of Bitcoin as collateral for financial applications on its blockchain without transferring the asset off the Bitcoin network.
In an X post on Wednesday, the network said the testnet allows developers, institutions, and infrastructure providers to test and integrate Bitcoin-backed lending, borrowing, and credit products ahead of a planned mainnet release.
The launch also introduces the Guardian Layer, an additional risk management feature for Bitcoin collateral. This layer uses a 2-of-2 multisig arrangement requiring signatures from both Hashi validators and a designated guardian. It aims to provide extra monitoring and safeguards for large transactions and collateral movements.
How Hashi works
Bitcoin’s market capitalization exceeds $1 trillion, yet the majority of BTC remains unused in lending or credit markets. Hashi seeks to address this by allowing native Bitcoin to function as programmable collateral on Sui. Legal analysis from the law firm Fenwick concluded that the deposit and redemption mechanics under Hashi should not trigger taxable events under current U.S. tax law.
Mysten Labs Co-Founder and Chief Product Officer Adeniyi Abiodun stated that major asset classes typically develop credit and liquidity markets, and Hashi is intended to support similar development for Bitcoin onchain.
Ecosystem starts growing
Day-one partner Wave Digital Assets has committed to a three-year effort to develop Bitcoin-yield bond products using the system. The testnet provides resources, including SDK documentation and integration guides, for builders to begin testing workflows, custody integrations, and application performance.
Several organizations are participating in the initial ecosystem. Custody and wallet providers include BitGo, Blockdaemon, Cobo, Fordefi, Ledger, and SwissBorg. Liquidity and trading participants listed are Bullish, Cumberland, Erebor, and FalconX. DeFi protocols such as AlphaLend, Bluefin, Current, Scallop, Suilend, Fluid, and Navi are preparing integrations. Additional partners cover vaults, asset management, oracles, insurance, and security auditing.
Hashi was initially introduced in March. The testnet phase now opens the system for broader integration and stress testing. Participants can validate technical setups and operational processes before full deployment.
Coinbase adds SUI staking
Moreover, Coinbase has enabled direct staking for SUI tokens on its platform. Users can now stake their holdings and receive rewards that accumulate directly to their accounts.
In an X post, Coinbase said staking is available via its dedicated staking page, though it is not offered in all regions.
Can the security hold up?
As Hashi moves through its testnet phase, security and operational reliability will remain key areas of focus before a mainnet launch.
The platform’s design relies on a multisig architecture, a Guardian Layer, and integrations with multiple infrastructure providers to manage Bitcoin-backed collateral. While these mechanisms are intended to strengthen security, they will be tested further during the public testnet as developers and partners validate the system under real-world conditions.
Like other DeFi infrastructure, Hashi will need to demonstrate that its security model, operational processes, and partner integrations perform as intended before broader adoption.
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