Hashi, a recently announced decentralized finance protocol, is preparing to introduce Bitcoin lending and yield generation tools on the Sui blockchain. The project’s developers seek to activate dormant Bitcoin liquidity and give holders more utility, with early institutional participation from notable digital asset players such as BitGo, Bullish, and FalconX.
Project Seeks To Transform Bitcoin’s Role In DeFi
Hashi’s creators outlined their aim to enable lending, borrowing, and earning opportunities with Bitcoin, aiming to increase the fraction of Bitcoin circulating in decentralized finance. Although Bitcoin’s total market capitalization stands above $1 trillion, estimates show less than 0.5% is actively utilized in DeFi applications. The protocol emerged to address what its founders see as significant untapped funding potential.
Development began with a test network phase, followed by a broader rollout scheduled for later in the year. A range of institutions—including BitGo, Bullish, FalconX, Erebor Bank, Ledger, and Fordefi—have committed to supporting the protocol, which is designed to connect both large organizations and self-custody clients with DeFi tools. Notably, BitGo specializes in institutional-grade crypto custody, while Bullish operates a regulated digital asset exchange, and FalconX focuses on trading services for professional market participants.
Core Features Include Cross-Chain Lending And Institutional Access
Initially, the lending function will allow Bitcoin holders to secure stablecoin loans by using their assets as collateral, without the need to sell holdings. Hashi will offer real-time visibility into interest rates, collateral valuations, and borrower health. This transparency responds to risk management needs, particularly for larger institutional participants.
The protocol design focuses both on institutional and self-custody clients, with seamless integration for users of platforms like BitGo and Ledger. The founders stated that all participants can access the system, whether they utilize a custodian or manage their own keys, aiming to broaden on-chain participation.
Project developers highlighted the protocol’s vision: “Hashi is here to change that, with commitments from industry leaders including BitGo, Bullish, Erebor Bank, FalconX, Fordefi, Ledger, and more.”
Hashi will use oracle data from CF Benchmarks, ensuring that lending prices reflect reliable market indexes. With decentralized data delivery, price accuracy and on-chain verification remain priorities for the team.
Security and risk coverage form a central focus for the protocol. Soter Insure, an industry insurance provider, is planning to offer protection for Bitcoin held as collateral by insuring against theft and loss events, with claims and payments denominated in Bitcoin.
Wave Digital, an investment firm, has proposed issuing Bitcoin-backed bonds through Hashi, a step intended to improve institutional fundraising efficiency, trading flexibility, and settlement speed on-chain. Other Sui blockchain applications including AlphaLend, Navi, Scallop, and Suilend plan to integrate with Hashi from the outset to expand its utility across DeFi.
Adeniyi Abiodun, co-founder of Mysten Labs—the developer group behind the Sui blockchain—commented that bringing Bitcoin to DeFi via Hashi could unlock substantial liquidity and foster a new wave of decentralized financial products on top of the protocol.
