A new Bitcoin-focused finance protocol called Hashi has launched on the Sui blockchain with early participation commitments from crypto institutions including BitGo, Bullish and FalconX ahead of a planned launch later this year.
Developed mainly by Mysten Labs, a core contributor to Sui, Hashi aims to let Bitcoin holders earn yield on native BTC through onchain lending and borrowing. The protocol will initially concentrate on BTC-backed lending, enabling users to borrow stablecoins against native BTC while institutional partners supply liquidity at launch.
Mysten Labs co-founder and CPO Adeniyi Abiodun said Hashi is designed to overcome structural barriers that have limited Bitcoin’s role in decentralized finance—chiefly reliance on intermediaries and opaque collateral practices. The system adds onchain verification and programmatic collateral management to improve transparency and make BTC lending more suitable for institutional use. “We are replacing ‘trust me’ workarounds with onchain verification,” Abiodun said.
Hashi intends to let native BTC be used directly in onchain financial services without relying on wrapped or synthetic versions, combining automated collateral management with transparency and features institutions require to scale use. The protocol plans to use multi-party computation (MPC) custody together with Sui smart contracts to manage collateral and lending flows, with audits and formal verification completed before launch. Additional planned features include insurance for BTC collateral and the potential issuance of Bitcoin-backed bonds. A devnet is expected soon and mainnet is targeted later this year.
Bitcoin remains lightly used in DeFi, with roughly 0.22% of supply—about $3.07 billion—deployed in decentralized finance protocols according to DefiLlama data. Hashi’s backers also include custodians and infrastructure providers such as Ledger and Cubist, and several Sui-based DeFi projects are expected to support lending, custody and collateral management when the platform goes live.
Bitcoin-backed lending rebounds after post-FTX collapse
Markets for Bitcoin-backed loans contracted sharply after the 2022 failures of lenders such as BlockFi and Celsius, where rehypothecation and opaque risk management led to large user losses. Rehypothecation—reusing customer collateral to back additional loans—amplified systemic risk and eroded trust in crypto lending.
Recently, interest in BTC-backed lending has revived as firms and regulators explore models that emphasize transparency, stronger collateral controls and lower counterparty risk. In June, U.S. housing regulators directed Fannie Mae and Freddie Mac to examine whether cryptocurrencies can count as borrower reserves for mortgage risk assessments, signaling a shift toward recognizing digital assets without forcing conversion to dollars.
Private companies have also tightened custody and risk controls: Strike updated its loan terms stating user BTC collateral is held in segregated wallets and not rehypothecated, Coinbase reintroduced Bitcoin-backed loans in the U.S. allowing eligible users to borrow up to $100,000 in USDC against BTC held on the platform, and firms like Ledn offer loans against Bitcoin with stricter custody practices.
Hashi enters this landscape aiming to provide onchain-native Bitcoin lending that combines institutional-grade custody, automated collateral management, and audit-backed assurances to broaden Bitcoin’s use in decentralized financial services.
