Bitcoin DeFi Is Taking Root on Sui—Here’s How It Works

Bitcoin is generally considered the most safe and decentralized digital active. But despite all its strength as a store of value, the historically little financial use is offered due to network restrictions, while the balloon flight price has not seen it as daily expenses for money.

Bitcoin Defi, also known as BTCFI – a term that refers to decentralized financing applications built on Bitcoin – has emerged to change that. Sui is one of the many Layer-1 block chains that now supports Bitcoin-based functionality, together with Solana, Aptos and Cardano.

“Most of us start our journey in digital assets such as Bitcoiners, attracted by BTC as a safe and valuable blue-chipactive but until recently, Bitcoin’s utility is mainly limited to a store of value.” said Adeniyi Abiodun, co-founder and CPO at Mysten Labs, the original team behind the Sui Network.

He added that sui makes access to Defi and rewards for Bitcoin users, so that they “can go beyond passive” from BTC.

What Bitcoin Defi looks like on sui

Sui’s BTCFI ecosystem now contains different different integrations. First Bitcoin (WBTC) was packed, brought in by the Sui Bridge. This version of Bitcoin, beaten on Ethereum and managed by Custodians, offers the fastest route to Defi apps on SUI. Users can implement their WBTC in decentralized fairs such as Bluefin, or loan protocols such as Suilend and Navi. While WBTC comes with trust, its liquidity and infrastructure are tested by fighting.

Then there is LBTC, a Bitcoin -dedicated published by Lombard Finance. It is designed for users who want their BTC to work in revenue strategies, with functions such as overcollateral mining and integration in Defi products with fixed-income incomes. LBTC offers flexibility and reduces part of the dependence on cross-chain bridges.

And more recently, Sui has expanded his BTCFI ecosystem by integrating with Bitcoin Layer-2 network stacks. The aim is to enable Bitcoin holders to participate in loans, borrowing, acting and liquid reinforcement services, usually traditionally limited to chains such as Ethereum or Solana, or packed versions of Bitcoin in various chains.

Abiodun said that Bitcoin-related assets have locked more than 10% of the total value (or TVL) on sui, of which he said that “tells us that there is a demand for Bitcoin to do more than just the sidelines.”

What is SBTC on Sui?

SBTC stands for Stacks BTC and is a 1: 1 Bitcoin-supported assets on the Bitcoin Layer-2 network stacks, which makes it possible to decentralized BTC in and out of Bitcoin layers without trusting centralized preservators. In contrast to packed assets such as WBTC, which depend on external managers to keep and publish tokens, SBTC uses a decentralized network of signatories.

These signatories approve SBTC minting and repayment via a threshold consensus mechanism – which needs 70% approval – to maintain both safety and liveliness of the protocol. The goal is to offer Bitcoin holders a way to access Defi protocols while retaining the trust-Geminimalized Ethos of Bitcoin itself.

AbioDun said that SBTC Bitcoin -holders lets earn rewards and participate in Defi using their bitcoin, without being dependent on centralized intermediaries. It also gives developers reliable, scalable access to Bitcoin liquidity, so that they can make more advanced and user-friendly applications.

“We are looking for potential integrations that will improve experiences of users and developers within a safe, fast and reliable environment,” said Abiodun, adding that Stack’s are part of the “growing list” of allies, including Babylon, Redstone, Lombard, Cubiest and Satlayer who work “Bitcoin’s full potential”.

From the stack side, the intention is to bridge Bitcoin in other ecosystems in a way that remains faithful to his ethos of decentralization.

“This integration between sui and stacks enables Bitcoin holders to use their BTC in Defi via Sui without any dependence on centralized preservators,” said Rena Shah, a contribution to the BD working group.

Thanks to this integration and SBTC, Stacks wants to help with the paving new roads for bitcoiners to make their ability productive.

“Participation in Bitcoin Direct is still limited,” Shah added. “Having an L1 -like Sui recognizes SBTC on Sui means that all holders can earn a yield and remain faithful to Bitcoin’s Trustless Ethos, where they choose to do Defi.”

Bitcoin Defi on other chains

Sui is not the only network building around Bitcoin. Other chains also race to unlock the BTC tool, but with a variety of decentralization and usability.

For example, Cardano has experimented with Bitcoin wrappers and synthetic assets that BTC holders can let in Defi via the extensive UTXO model of Cardano.

On Cardano, Bitcoinos improves the extensive UTXO (EUTXO) model by enable BTC to communicate with the smart contracts of Cardano. This allows Bitcoin holders to use their BTC in Defi activities such as loans or deporting on Cardano’s protocols, such as those driven by AnetabTC.

Meanwhile, Solana supports WBTC via Ethereum bridges, with integration over decentralized fairs (or Dexes) such as Jupiter and ORCA. But the Bitcoin liquidity is relatively thin compared to ETH-based assets.

What distinguishes Sui is the attempt to unite these models, offering storage bridges, synthetic derivatives and trust-Geminimalized assets within a single environment.

Apptos and Sui are both low-1 block chains built with the relocation programming language and both were made on BTCFI. However, they differ in their technical approaches and focus.

APTOS emphasizes yield driven Defi through integrations such as XBTC (via OKX). The connections, such as with the B² network, make confidential Bitcoin bridges and deliver opportunities, making it a hub for Defi protocols such as Panora Exchange and RAM markets. The environment of Aptos gives priority to Bitcoin -Liquidity for loans, exchange and deployment.

Expand the use of Bitcoin

The use of Bitcoin directly on the chain remains restrictive for most users. Native BTC transactions do not support smart contracts and the development of applications directly on Bitcoin is still difficult, despite the progress of projects such as ordinals and BITVM.

Abiodun said that sui “expands the usefulness of Bitcoin, so that users can go beyond keeping.”

The growing BTCFI category is intended to put Bitcoin in active use without endangering decentralization. The approach of Sui – via SBTC, WBTC, LBTC and other assets – indicates how multiple routes to BTC utensils can co -exist within one ecosystem. Sui recently also announced a collaboration with Bitlayer to launch the “First Trust-Minimized Bitvm Bridge” on Sui.

And apparently more is coming, with Abiodun who says that “BTCFI is an important strategic priority this year” for the SUI ecosystem.

Published by Andrew Hayward