A new Bitcoin-based finance protocol named Hashi has been introduced on the Sui blockchain, with early participation commitments from major crypto institutions including BitGo, Bullish, and FalconX ahead of its planned mainnet launch later this year. Developed primarily by Mysten Labs, the core contributor to Sui, Hashi is designed to let Bitcoin holders earn yield on native BTC through on-chain lending and borrowing.
The protocol aims to address structural limitations that have held back Bitcoin's use in decentralized finance (DeFi), such as reliance on intermediaries and limited transparency around collateral. A Sui Foundation spokesperson stated, "We are replacing 'trust me' workarounds with onchain verification." Hashi will enable native BTC to be used directly in on-chain financial services without relying on wrapped or synthetic assets, bringing programmatic collateral management and transparency aimed at institutional adoption.
Currently, Bitcoin remains largely unused in DeFi, with only about 0.22% of its supply (roughly $3.07 billion) deployed in DeFi protocols. The rollout also includes participation commitments from custodians and infrastructure providers such as Ledger and Cubist, along with Sui-based DeFi protocols expected to support lending, custody, and collateral management.
Hashi will rely on a combination of multi-party computation custody and smart contracts on Sui to manage collateral and facilitate lending, with audits and formal verification planned before launch. Additional features outlined include insurance coverage for BTC collateral and plans for issuing Bitcoin-backed bonds. The project is currently in development, with a devnet expected soon and a mainnet launch planned for later this year.
The news comes amid a broader recovery in Bitcoin-backed lending markets, which shrank sharply following the 2022 collapses of crypto lenders BlockFi and Celsius Network. Recent developments include the US Federal Housing Finance Agency directing Fannie Mae and Freddie Mac to explore counting cryptocurrencies as borrower reserves, and companies like Coinbase and Strike reintroducing or updating their Bitcoin-backed loan products with enhanced transparency and custody controls.
