- Sui has unveiled the Hashi testnet, allowing Bitcoin holders to use native BTC as collateral for DeFi without giving up custody of their coins.
- The protocol combines a 2-of-2 multisig Guardian Layer, real-time oracles, and automated collateral management to strengthen security.
- More than 25 partners, including Coinbase, BitGo, Ledger, and SwissBorg, are supporting the initiative as Sui expands its Bitcoin DeFi ecosystem.
Sui Network has introduced the Hashi testnet, a new protocol designed to unlock decentralized finance opportunities for Bitcoin holders while allowing them to retain control of their assets.
Unlike traditional Bitcoin DeFi solutions that rely on wrapped tokens or centralized custody, Hashi is built to let users use native Bitcoin as collateral for lending, borrowing, and other financial services while the BTC remains secured on the Bitcoin blockchain.
The launch represents another step in the growing effort to bring Bitcoin’s liquidity into decentralized finance without sacrificing the network’s security model.
Native Bitcoin Without Traditional Wrapping
Hashi is designed around a decentralized collateralization model that avoids conventional wrapped Bitcoin structures.
Instead of transferring BTC into custodial systems, users can pledge their Bitcoin as collateral while accessing DeFi applications built on Sui.
The protocol’s security is anchored by its Guardian Layer, which uses a 2-of-2 multisignature architecture requiring approval from both Hashi validators and independent guardians before transactions are finalized.
For institutional users, additional threshold signature technology provides another layer of protection against unauthorized access.
Automated Risk Management
Hashi also incorporates several mechanisms aimed at improving risk management.
Real-time price oracles continuously update collateral values, helping ensure that loan positions accurately reflect market conditions.
The platform’s automated collateral management system can respond when collateral ratios approach liquidation thresholds, reducing reliance on manual intervention and helping maintain protocol stability.
The overall design is intended to minimize trust assumptions while allowing users to participate in Bitcoin-backed decentralized finance.
Strong Institutional Support
The testnet launches with backing from more than 25 ecosystem partners spanning custody providers, liquidity firms, and DeFi protocols.
Among the participating organizations are Wave Digital Assets, SwissBorg, Cumberland, Fluid, BitGo, and Ledger.
At the same time, Coinbase announced that it will begin offering staking services for SUI, further strengthening institutional involvement in the network as Hashi moves toward an eventual mainnet release.
Regulatory Clarity Could Be a Competitive Advantage
One notable aspect of the launch is a legal opinion issued by law firm Fenwick, which concluded that Hashi’s deposit and redemption process should not trigger taxable events under current U.S. law.
If that interpretation ultimately holds, it could remove one of the longstanding concerns associated with wrapped Bitcoin products and make the platform more attractive to both retail and institutional participants.
As competition intensifies among Bitcoin DeFi projects such as Stacks, Babylon, and other emerging protocols, Sui is positioning Hashi as a security-focused alternative that emphasizes self-custody, institutional-grade safeguards, and regulatory clarity.
