An innovative Bitcoin financial protocol named Hashi has officially launched on the Sui blockchain. The protocol has secured early backing from prominent crypto institutions including BitGo, Bullish, and FalconX, ahead of its full rollout planned for later this year.
According to an announcement obtained by Cointelegraph, Hashi aims to enable Bitcoin holders to earn yield on native Bitcoin (BTC) through on-chain lending and other methods. This move targets a niche segment that currently represents a small fraction of the overall Bitcoin market.
Developed primarily by Mysten Labs, a core contributor to the Sui blockchain, the protocol will initially focus on BTC-based lending services. Users will be able to borrow stablecoins by collateralizing their held Bitcoin, while institutions are expected to provide liquidity upon the protocol's launch.
A spokesperson for the Sui Foundation told Cointelegraph that the development of the Hashi protocol is intended to address some of the structural limitations that have long constrained Bitcoin's application in the decentralized finance (DeFi News) space, particularly the reliance on intermediaries and insufficient collateral transparency.
The system introduces on-chain verification and programmatic collateral management mechanisms, aiming to enhance the institutional suitability of BTC lending services. "We are replacing 'trust me' workarounds with on-chain verification," the spokesperson emphasized.
The launch plan also involves commitments from custodians and infrastructure providers such as Ledger and Cubist. Furthermore, DeFi News protocols within the Sui ecosystem are anticipated to offer support in lending, custody, and collateral management following the platform's introduction.
Hashi stated it will utilize a combination of multi-party computation (MPC) custody and smart contracts on Sui to manage collateral and facilitate lending activities. Prior to its official launch, the protocol will undergo audits and formal verification.
Other planned features include insurance coverage for BTC collateral and the concept of issuing Bitcoin-backed bonds. The project is currently in its development phase, with a developer network (devnet) expected soon and a mainnet launch planned for later this year.
Following the FTX event, Bitcoin collateralized lending is seeing a resurgence.
Previously, the practice of "rehypothecation," where customer collateral was repeatedly pledged to generate additional loans, amplified systemic risks and led to widespread loss of confidence in crypto lending platforms.
However, in recent years, interest in Bitcoin collateralized lending has begun to rebound as regulators and businesses actively explore models that emphasize transparency, prudent collateral management, and reduced counterparty risk.
In January, Coinbase relaunched its Bitcoin collateralized loan service in the United States, allowing eligible U.S. users to borrow up to $100,000 in USDC against the BTC held on their platform.