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- Sui launches Hashi to expand Bitcoin liquidity and boost DeFi participation.
- Hashi enables BTC lending, borrowing, and yield without selling assets.
- Institutional support and insurance layer aim to improve trust and adoption.
Sui, a Layer-1 blockchain, has launched Hashi, a new infrastructure layer aimed at expanding Bitcoin use in decentralized finance. The release targets limited BTC participation in DeFi despite its dominant market position and growing institutional demand.
The announcement highlights a key gap in the market. Bitcoin holds the largest share of crypto value. However, only a small portion of its supply is used in DeFi protocols today.
Hashi is built to allow Bitcoin holders to access financial services without selling their assets. Users can deploy BTC into lending, borrowing, and yield strategies. This approach keeps exposure to Bitcoin while unlocking liquidity.
The platform enters the market with strong institutional support. Partners include BitGo, Bullish, FalconX, and Ledger. These firms contribute custody, liquidity, and infrastructure services.
Sui Enables BTC Lending With Onchain Transparency
Other partners will add support for data, compliance, and security layers. This structure is expected to promote trust and transparency. These have been challenges for institutional adoption for Bitcoin-based DeFi.
The most prominent use case is expected to be for lending. Bitcoin holders will be able to use BTC as collateral for stablecoins. They will also be able to offer loans.
However, smart contracts will be used for executing these processes. This will minimize intermediaries. There will be real-time tracking of positions and loans.
Hashi introduces credit origination tools for users. These tools allow access to liquidity without selling Bitcoin. This model is designed for long-term holders seeking capital efficiency.
The infrastructure does not rely on assets such as wrapped Bitcoin. Rather, it uses a smart contract-based system. This system maps Bitcoin addresses with on-chain activity.
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This increases the transparency of the network. It allows users to view the activity of the system, including collateral and loan health. This increases the transparency of cross-chain activity.
Moreover, the infrastructure receives support from CF Benchmarks and Cubist. These entities offer pricing information and asset movement functionality. Smart contract verification is handled by Certora.
Hashi Adds Insurance and Expands Use Cases
Another aspect included in the system is risk management. It provides insurance coverage through Soter Insure. The policies are denominated in Bitcoin.
However, it facilitates payments in BTC and can help in mitigating asset-liability mismatch risk. It can also act as a protection layer in large capital deployments.
Hashi can be used to create more than just lending markets. However, it can be used to create new financial products. These include structured products and asset management vaults.
The possibilities in the future can include tokenized products. Bitcoin-backed bond issuances are also being considered. Companies like Wave Digital are studying these possibilities.
However, the launch represents a broader effort to expand the utility of Bitcoin. It extends beyond its role as a store of value. Its adoption will depend on institutional participation and system performance.
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