Sui’s Hashi Bitcoin Lending Protocol Secures $500M in Commitments
Sui is preparing to introduce a new approach to Bitcoin-backed lending through Hashi, an institutional-focused protocol designed to let Bitcoin holders use their BTC as collateral without moving the underlying coins away from the Bitcoin network. The mainnet launch is planned as a phased rollout later in October 2026.
The initiative has attracted more than $500 million in capital commitments from over 20 industry partners. These commitments are not the same as funds already deposited, but they are intended to give lending and borrowing markets liquidity as the protocol begins operating. The announcement was published by the Sui Foundation.
Hashi Targets Institutional Bitcoin Holders
Hashi is designed to address a longstanding challenge in crypto finance: allowing Bitcoin owners to access credit and decentralized finance (DeFi) applications without selling their BTC or relying on conventional wrapped-asset arrangements.
Sui estimates that approximately $1 trillion worth of Bitcoin remains idle. Much of this capital belongs to holders who may want to put their assets to work but require greater control over custody, security and operational processes before participating in onchain financial markets.
The protocol aims to create another option for institutions, businesses and other Bitcoin holders seeking liquidity. Potential applications include borrowing, lending, credit markets, vaults and structured financial products. These services could allow eligible holders to access funds while retaining exposure to their Bitcoin, subject to each product’s terms and risks.
More Than $500 Million Committed Ahead of Launch
The planned launch has attracted a coalition of more than 20 companies across custody, trading, liquidity provision, infrastructure and decentralized finance. Anchorage Digital is among the partners and is expected to provide institutional access routes and additional stablecoin liquidity.
The commitments are intended to give Hashi’s financial applications a starting pool of capital rather than requiring every market to build liquidity from scratch. However, committed capital should not be confused with completed deposits, active lending balances or funds already available to every user.
Adeniyi Abiodun, co-founder and chief product officer of Mysten Labs, the original creator of Sui, said the initiative is being built around institutional demand for Bitcoin finance that preserves required protections. Anchorage Digital CEO and co-founder Nathan McCauley also highlighted the limitations institutions face when trying to deploy Bitcoin through existing financial infrastructure.
How Hashi Uses Bitcoin as Collateral
Hashi’s core mechanism is designed to keep the underlying Bitcoin on the Bitcoin blockchain. A user deposits BTC into a designated vault address secured through a multisignature arrangement. The protocol’s validators and a separate guardian mechanism participate in controlling the release of collateral.
Once the deposit is confirmed, Hashi issues hBTC on Sui, representing the Bitcoin deposited into the system. This token can then interact with applications on Sui, allowing the corresponding value to be used in supported lending and borrowing markets.
The process is described in the Hashi protocol’s official design documentation. Users should understand that keeping BTC on its native blockchain does not eliminate every form of risk: access to collateral still depends on the protocol’s security mechanisms, smart contracts and withdrawal process.
What Happens When Users Withdraw Bitcoin?
When a user wants to retrieve the original BTC, the corresponding hBTC is burned on Sui. That burn is part of the process that triggers the release of the Bitcoin collateral back to the user’s Bitcoin address.
This design links activity across two separate blockchains. Bitcoin holds the underlying collateral, while Sui provides the smart-contract environment where the representative asset can be used in supported financial applications.
The arrangement is intended to make Bitcoin more usable in programmable financial products without requiring the underlying asset to be sold. Users will still need to consider collateral requirements, borrowing costs, liquidation rules and the conditions for withdrawing funds in each application.
Security Reviews and the Guardian Layer
Security is a central part of Hashi’s design because the protocol coordinates valuable Bitcoin collateral across different blockchain environments. The launch announcement states that Hashi’s smart contracts underwent formal verification by Certora, while CommonPrefix reviewed the cryptography used in its multiparty computation (MPC) protocol.
The system also incorporates a separate guardian layer intended to monitor collateral movements and slow or stop suspicious activity before Bitcoin is released. The multisignature setup and guardian mechanism are designed to provide multiple safeguards rather than relying on a single control.
These reviews and safeguards do not guarantee that a protocol is free from vulnerabilities. Smart-contract errors, operational failures and weaknesses in cross-chain coordination remain important considerations for anyone using Bitcoin-backed financial products.
What Hashi Could Mean for Bitcoin Finance
Hashi’s planned launch reflects efforts to expand Bitcoin’s role beyond holding and transferring the asset. If the protocol attracts active lenders, borrowers and liquidity providers, it could support a wider range of financial services built around native BTC collateral.
The $500 million in commitments provides an initial indication of partner participation, but adoption will depend on how much capital enters the system, which applications become available and whether institutions are comfortable with the protocol’s custody and security model.
For now, Hashi’s phased mainnet rollout is the next milestone. Its progress will help show whether Bitcoin-backed lending on Sui can turn committed capital and institutional interest into functioning markets while keeping the underlying BTC on the Bitcoin network.
