The Sui Foundation and Mysten Labs launched the testnet for Hashi earlier this week, a Bitcoin-collateral protocol that lets BTC back onchain loans without ever leaving the Bitcoin network.
Key Takeaways
Sui Foundation launched Hashi’s testnet July 22, letting Bitcoin collateralize decentralized finance (DeFi) loans without wrapping.Over 25 institutional partners, including Bitgo, Cumberland and Wave Digital, are testing Hashi.Hashi targets a slice of bitcoin’s $1.4T market as Mysten Labs eyes a mainnet launch next.“Bitcoin is no different” from other major assets when it comes to building credit markets around it, Mysten Labs Co-Founder and Chief Product Officer Adeniyi Abiodun said, adding that Hashi provides “the infrastructure to build those markets onchain with the security, transparency, and programmability institutions have been waiting for.”
How Hashi Actually WorksHashi keeps bitcoin on the Bitcoin network itself rather than moving or re-minting it elsewhere. Deposits are secured through a 2-of-2 multisig arrangement requiring signatures from both Hashi’s multi-party computation (MPC) validators and a separate Guardian Layer, a configurable risk-management system designed to slow or block suspicious withdrawals before collateral can leave the system.
Loan terms and collateral positions are then tracked onchain, giving lenders full visibility instead of relying on an intermediary’s word for how much bitcoin actually backs a given loan.
The structure also carries a tax advantage over rival designs. Deposits and redemptions are structured, according to legal analysis cited by Sui, to avoid triggering taxable events under U.S. tax law, a meaningful detail for institutions weighing whether to put bitcoin to work rather than let it sit idle.
Wave Digital Assets has also committed to a three-year plan prioritizing bitcoin-yield-bearing bond tokenization on Sui once Hashi reaches mainnet, one of the clearest signs yet that traditional finance players see the protocol as more than a DeFi experiment.
That said, Hashi has no announced mainnet date yet, and the testnet phase exists specifically so builders and institutions can integrate lending, borrowing, and credit products before real money is at stake. If the pilot holds up, Hashi would give bitcoin holders a way to earn yield on native BTC without the custodial single-point-of-failure risk that hit Volo Protocol just three months ago.
