Sui, a layer-1 blockchain, is preparing to introduce Hashi, a new institutional protocol that will let Bitcoin holders use their BTC as collateral for loans without moving the assets off the Bitcoin network.
The project is expected to bring a substantial increase in liquidity to Bitcoin-backed finance. Hashi’s mainnet is scheduled to launch in stages later this month, offering institutions a way to access financing while keeping their original Bitcoin on its native blockchain.
More than 20 industry partners have committed a combined $500 million to support the Hashi ecosystem. While these pledges do not mean the money has already entered the system, they are intended to provide a strong liquidity base from the beginning rather than leaving the new markets to develop without initial funding.
Adeniyi Abiodun, co-founder and chief product officer of Mysten Labs, the original creator of Sui, said the project is launching with substantial capital and industry backing because institutions want to generate returns from Bitcoin without compromising their security requirements.
Hashi is designed to address the challenge of putting dormant Bitcoin holdings to productive use. Sui estimates that around $1 trillion in BTC remains inactive. Institutional investors and companies have faced difficulties finding transparent, compliant infrastructure that allows them to deploy native Bitcoin in decentralized finance (DeFi).
Bitcoin-backed lending is also expanding beyond speculative trading. Holders increasingly use loans secured by BTC to pay for real-world needs, including higher education, property purchases and business operating expenses.
Nathan McCauley, co-founder and CEO of Anchorage Digital, said public companies and institutional investors hold significant Bitcoin reserves but have been limited in how they can use them because of existing technological barriers. Anchorage Digital is an early Hashi launch partner and plans to provide stablecoin liquidity to the network.
McCauley said connecting Anchorage Digital’s institutional customers to Hashi could fundamentally change how they access financial services backed by Bitcoin.
Hashi’s design avoids the need to transfer Bitcoin through a cross-chain bridge. Instead, users lock their BTC in a vault address on the Bitcoin blockchain itself. The vault is protected by a 2-of-2 multisignature mechanism, which requires cryptographic approval from both Hashi validators. An additional independent guardian layer monitors collateral movements and is designed to slow potentially suspicious activity.
Once the BTC is locked, Hashi creates hBTC tokens on Sui that are backed by the deposited Bitcoin. The original assets remain on the Bitcoin network while the corresponding tokens can be used across Sui applications.
These hBTC tokens support activities such as lending, borrowing, credit-market transactions and real-world asset trading. When a user wants to reclaim their BTC, the equivalent hBTC is permanently destroyed on Sui. This initiates the multisignature process needed to release the original Bitcoin from the vault and return it to the user.
To strengthen security and meet institutional standards, Hashi has undergone independent technical reviews. Certora formally verified its smart contracts, while CommonPrefix assessed the cryptographic design of its multi-party computation (MPC) protocol.
