Sui’s Hashi Testnet Goes Live, Targeting a Slice of Bitcoin’s $1.4 Trillion Market

A Bridge Constructed to Keep away from Bridges

The Sui Basis and Mysten Labs confirmed Hashi’s testnet went live on July 22, the most recent step in a venture designed to let bitcoin operate as collateral in onchain lending and credit score markets with out wrapping it into a artificial token or bridging it to a different chain (the 2 approaches which have repeatedly prompted losses throughout DeFi).

Sui first introduced Hashi on the devnet stage back in March, positioning the protocol as a technique to unlock capital effectivity throughout bitcoin’s roughly $1.4 trillion market.

“Bitcoin is not any totally different” from different main belongings with regards to constructing credit score markets round it, Mysten Labs Co-Founder and Chief Product Officer Adeniyi Abiodun stated, including that Hashi gives “the infrastructure to construct these markets onchain with the safety, transparency, and programmability establishments have been ready for.”

How Hashi Truly Works

Hashi retains bitcoin on the Bitcoin community itself somewhat than shifting or re-minting it elsewhere. Deposits are secured by a 2-of-2 multisig association requiring signatures from each Hashi’s multi-party computation (MPC) validators and a separate Guardian Layer, a configurable risk-management system designed to sluggish or block suspicious withdrawals earlier than collateral can depart the system.

Mortgage phrases and collateral positions are then tracked onchain, giving lenders full visibility as an alternative of counting on an middleman’s phrase for the way a lot bitcoin truly backs a given mortgage.

The construction additionally carries a tax benefit over rival designs. Deposits and redemptions are structured, in line with authorized evaluation cited by Sui, to keep away from triggering taxable occasions underneath U.S. tax legislation, a significant element for establishments weighing whether or not to place bitcoin to work somewhat than let it sit idle.

Why the Wrapped-BTC Threat Is Actual

The danger Hashi is constructed to sidestep isn’t hypothetical, and Sui’s personal ecosystem has already lived by it. Volo Protocol, a liquid staking and bitcoin-finance platform additionally constructed on Sui, misplaced $3.5 million in an April 2026 exploit after an attacker compromised a vault admin’s personal key, draining roughly $2.1 million in wrapped bitcoin (WBTC) from three vaults. That’s the precise failure mode (i.e. a single custodial key controlling wrapped collateral) that Hashi’s multisig-plus-Guardian-Layer design is supposed to make far more durable to tug off.

Sui has taken different paths to bitcoin liquidity too. Threshold’s tBTC went live on Sui as a decentralized, non-custodial wrapped bitcoin different, and the Sui Bridge separately launched on mainnet to maneuver belongings like ether between Ethereum and Sui. Hashi is a totally different wager the place somewhat than wrapping or bridging bitcoin in any respect, it leaves the asset on Bitcoin’s personal chain and settles every little thing else round it.

Who’s Already Testing It

Greater than 25 institutional partners are already stress-testing lending and credit score purposes on the testnet, together with custody big Bitgo, buying and selling companies Cumberland and FalconX, {hardware} pockets maker Ledger, infrastructure supplier Blockdaemon, change Bullish, and Sui-native lending platforms Navi and Scallop.

Wave Digital Belongings has additionally dedicated to a three-year plan prioritizing bitcoin-yield-bearing bond tokenization on Sui as soon as Hashi reaches mainnet, one of the clearest indicators but that conventional finance gamers see the protocol as greater than a DeFi experiment.

That stated, Hashi has no introduced mainnet date but, and the testnet part exists particularly so builders and establishments can combine lending, borrowing, and credit score merchandise earlier than actual cash is at stake. If the pilot holds up, Hashi would give bitcoin holders a technique to earn yield on native BTC with out the custodial single-point-of-failure danger that hit Volo Protocol simply three months in the past.