Bitcoin-backed lending: Sui's Hashi launches with $500M

Sui's Hashi launches with $500M in commitments, letting institutions use Bitcoin as collateral without moving it off the Bitcoin ledger.

Sui is preparing to launch Hashi, an institutional network for Bitcoin-backed lending, with $500 million in pre-pledged capital commitments from more than 20 partners. The move comes as crypto lending stages a comeback, with total value locked climbing 55% since July to around $56 billion. But the sector is still healing from a bruising second quarter, and the new network is betting that stricter security can win back institutional trust.

What happened

Hashi is designed to let Bitcoin holders use their BTC as collateral for loans without moving the asset off the Bitcoin blockchain. Instead of bridging Bitcoin to another chain, Hashi locks the BTC in a vault address on Bitcoin itself, secured by a 2-of-2 multisig that requires sign-off from Hashi's validators. A separate guardian layer monitors and can slow suspicious collateral movements.

After being locked, Hashi issues hBTC, a digital voucher on Sui that stands for the deposit. That voucher is then usable throughout Sui for lending, borrowing, credit markets, and real-world asset trading. Upon a user's exit, the hBTC is permanently burned on Sui, which prompts the multisig to unlock the original Bitcoin.

Hashi's mainnet is scheduled to launch in stages later this month, although no precise date has been given. The $500 million figure reflects capital commitments rather than immediate deposits. Certora formally verified Hashi's smart contracts, while CommonPrefix audited the cryptography underlying its multi-party computation protocol.

Why it matters

Sui puts the amount of Bitcoin lying dormant at roughly $1 trillion. For institutions and public companies holding sizable BTC balances, being unable to deploy that capital has been a persistent limitation. Nathan McCauley, CEO and co-founder of Anchorage Digital, described linking institutional clients with Hashi as an entirely new paradigm.

Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs, described the launch as an answer to institutional demand: they want to deploy Bitcoin without giving up required protections. The phased rollout and pre-pledged capital point to a measured, risk-conscious strategy instead of a rush to attract deposits.

Market reaction

Live market data shows Bitcoin trading at $82,551.00, down 0.46% over 24 hours, with $39,957,259,280 in volume and a market cap of $1,659,099,077,821. Ethereum is at $2,499.50, down 2.50%, with $18,344,300,715 in volume and a $305,328,117,888 market cap. The muted price action suggests the Hashi news has not yet driven a broad market move, which is typical for infrastructure announcements that are still pre-launch.

What to watch next

The recovery in the lending sector is genuine, yet it remains precarious. Around $56 billion in total lending value sits locked, marking a 55% gain since July, even though $11.33 billion exited the sector during Q2 and the market shrank by 16.78%. The April Kelp DAO hack served as a key trigger: attackers generated 116,500 rsETH that lacked backing, valued at roughly $290 million at the time, and a large portion of those tokens were pledged as collateral on Aave to secure other assets. While Aave's contracts themselves were never compromised, deposits dropped by approximately $15 billion in the following days, prompting the protocol to freeze its rsETH and wrsETH markets.

In the time since, Aave has begun a gradual wind-down across six networks that failed to satisfy chain-level requirements. Spark started retiring rsETH from SparkLend in January, ahead of the April exploit. Such steps signal a wider movement toward tighter risk controls.

Security posture: Hashi's guardian layer and multisig design will be tested by real-world usage. Aave used mutation testing to inject bugs into V4 contracts and caught 271 of 304 vulnerabilities, showing that AI-assisted testing is becoming part of the toolkit.
Institutional adoption: Whether the $500 million in commitments converts into active deposits will signal how much demand exists for compliant Bitcoin collateral.
Ecosystem dependencies: As Stani Kulechov, founder and CEO of Aave Labs, observed, conventional reviews overlooked risks in bridges, verifier networks, and other infrastructure. Hashi's MPC and multisig setup will require continued examination.

According to Thomas Wu, CFO of Ledn, each wrapper, bridge, and oracle connecting a lender to the underlying asset creates an additional point where a loan may fail. Sid Powell, co-founder and CEO of Maple, argued that prudent lenders ought to operate on the assumption that any borrower could default at any moment. Shawn Owen, founder and CEO of SALT Lending, observed that human error continues to be among the largest weaknesses and frequently gets missed during smart contract audits.

For traders and holders alike, the central question is whether Hashi can draw authentic institutional volume without reproducing the intertwined risks that worsened previous crises. The network's architecture—keeping BTC on Bitcoin, employing a voucher on Sui, and introducing a guardian layer—is a careful effort to contain risk. Yet, as Sam MacPherson, CEO of Spark, pointed out, teams must also examine governance design, operational security, collateral quality, liquidity management, and dependencies throughout the broader ecosystem.

FAQ

What is Hashi and how does it work?

Hashi is an institutional network on Sui that enables Bitcoin holders to use BTC as collateral without transferring it away from the Bitcoin ledger. It locks BTC in a vault address protected by a 2-of-2 multisig and issues hBTC, a voucher on Sui usable for lending, borrowing, and real-world asset trading. Upon exit, the hBTC is burned and the original Bitcoin is freed.

Why is Bitcoin-backed lending growing now?

Crypto lending has rebounded 55% since July to around $56 billion in total value locked, driven by demand for yield and institutional interest in putting idle Bitcoin to work. Sui estimates $1 trillion in Bitcoin is sitting idle. However, the sector is still recovering from the April Kelp DAO hack and a 16.78% contraction in Q2, so growth is tempered by caution.

What risks should investors watch with Hashi?

The main risks include smart contract vulnerabilities, multisig key management, and dependencies on bridges or oracles. Hashi has taken steps to mitigate these with formal verification by Certora, a cryptography review by CommonPrefix, and a guardian layer. But as industry leaders note, human error and interlinked protocol risks remain. The phased rollout and pre-pledged capital structure suggest a measured approach, but no system is risk-free.

Market snapshot

Prices at the time of writing (Oct 9, 2026 08:05 UTC).

Bitcoin (BTC): $82,551.00 — 24h -0.46%
Ethereum (ETH): $2,499.50 — 24h -2.50%

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Sui's Hashi Brings Bitcoin-Backed Lending to Institutions