Layer-1 blockchain Sui is launching Hashi, an institutional protocol designed to allow bitcoin holders to use their assets as collateral for lending without transferring them off the Bitcoin network. The mainnet is scheduled to roll out in phases later this month.
The initiative has secured $500 million in capital commitments from a coalition of over 20 industry partners. While these represent pre-pledged commitments rather than immediate deposits, the capital is intended to ensure the system debuts with sufficient liquidity.
How Hashi Works
The protocol uses a distinctive technical approach to keep bitcoin secure on its native blockchain. Users lock their BTC in a vault address directly on the Bitcoin network, secured by a 2-of-2 multisig that requires cryptographic approval from Hashi's validators. The system includes a separate guardian layer designed to monitor and slow suspicious collateral movements.
While the actual bitcoin remains frozen on the Bitcoin network, Hashi mints hBTC, a digital voucher token on Sui that is backed by the deposited bitcoin. Applications on Sui can then use these hBTC vouchers to facilitate lending, borrowing, credit markets, and real-world asset trading. When users exit, the hBTC voucher is burned on Sui, which triggers the multisig to unlock and return the original bitcoin to the user on the Bitcoin network.
Targeting Dormant Bitcoin Holdings
Sui estimates that approximately $1 trillion in bitcoin is currently idle, particularly among institutional and corporate balance-sheet holders who have lacked a compliant ecosystem to deploy native bitcoin in decentralized finance.
According to Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs, the creator of Sui, the protocol addresses institutional demand. "Institutions want to put Bitcoin to work without giving up the protections they require," Abiodun said.
Nathan McCauley, CEO and co-founder of Anchorage Digital, a launch partner planning to supply stablecoin liquidity to the network, characterized the development as significant for institutional users. "Public companies and institutions hold enormous amounts of Bitcoin, but their ability to use that capital has been constrained by the technology available to them," McCauley said.
Security and Compliance
To meet institutional compliance and security standards, Hashi has undergone formal security reviews. Security firm Certora formally verified Hashi's smart contracts, while CommonPrefix reviewed the cryptography of its multi-party computation protocol.
