Key Takeaways:
Sui's Hashi bitcoin lending protocol processed 1.1 million deposits and 165,000 withdrawals in the three weeks since its July 22 testnet launch, onchain data shows.
The deposit pace reflects early retail and institutional appetite for bringing native bitcoin onto Sui without wrapping the asset into a synthetic token, a model that has drawn scrutiny on other chains after repeated bridge exploits drained hundreds of millions of dollars from custodial designs in recent years.
Hashi was introduced by the Sui Foundation in March 2026 as a decentralized primitive built to let bitcoin function as collateral in onchain lending and credit markets. The project moved through a private devnet phase before opening the current public testnet, giving developers access to software development kits and integration guides ahead of an eventual mainnet rollout.
Bitcoin-linked DeFi has had a rough 2026, with layer-2 BTCFi total value locked falling roughly 74 percent from 2025 highs to about 91,000 BTC by mid-year. Hashi's pitch of keeping BTC on its native chain rather than wrapping it is a direct response to that skepticism, and the early deposit and withdrawal counts give Sui a data point to argue the approach is finding an audience despite the broader pullback.
Unlike conventional wrapped-asset bridges, Hashi does not move bitcoin off the Bitcoin network. Users deposit native BTC, Sui validators confirm the transaction, and the protocol mints hBTC, a representative token that can be used as programmable collateral for institutional lending and stablecoin borrowing while the underlying bitcoin stays on its own chain.
Security rests on a layered design where deposits are secured by a 2-of-2 multisig requiring signatures from the protocol's multi-party computation (MPC) validators, a cryptographic setup in which no single party ever holds a complete private key. Withdrawals pass through a Guardian Layer, a configurable risk-management system that functions as a circuit breaker, reviewing large withdrawal requests against preset thresholds before they clear.
More than 25 institutions are currently stress-testing the system, including custody and trading heavyweights Bitgo and Cumberland alongside Swissborg, Fluid and Ledger. Their participation spans trading desks, custody infrastructure and wealth platforms, pointing to demand for compliant, non-custodial ways to put idle bitcoin to work in DeFi without taking on the counterparty risk that has dogged earlier wrapped-bitcoin bridges.
The protocol's revenue model leans on interest-rate spreads between what depositors earn and what borrowers pay for bitcoin-backed loans, rather than relying on inflationary token emissions to bootstrap activity. That structure mirrors how traditional lending desks price credit, an approach Sui's backers argue will hold up better once testnet incentives disappear and real capital is on the line.
If Hashi can eventually capture even a small share of the $1.4 trillion bitcoin market for onchain lending, it would represent one of the more significant crossovers between Bitcoin's balance sheet and a non-Bitcoin DeFi ecosystem so far.
This article is for informational purposes only and does not constitute investment advice.
