Layer-1 network Sui announced that, in the coming months, it will add support for sBTC, a one-to-one BTC-backed asset from Bitcoin Layer-2 chain Stacks, expanding the BTCfi space.
The press release says that the integration will allow holders to deploy Bitcoin into decentralized finance (DeFi) via Sui’s infrastructure. Notably, there are no centralized custodians involved in the process.
Furthermore, the team says Sui Foundation will operate a validator on the Stacks network.
It argues that this partnership will allow Bitcoin’s $1.6 trillion in liquidity to unlock “new onchain opportunities that preserve the asset’s native security while unlocking DeFi use cases like lending, borrowing, and trading.”
Moreover, the sBTC support will enable developers to access this massive liquidity via a decentralized asset. At the same time, they’ll be able to build “more composable applications with rich asset behavior” through Sui, the announcement says.
Additionally, Sui notes that they’ve already entered the Bitcoin DeFi space with multiple previous partnerships. This includes Babylon, Lombard Finance, Cubist, and SatLayer.
BTCfi Hits $5.8 Billion in TVL
Sui says that it will continue to “lay the foundation for the most complete Bitcoin DeFi ecosystem in crypto.” Adding sBTC is the latest step, which will enable the coin holders to “repurpose” their BTC and leverage Sui’s expanding DeFi ecosystem.
The team also argues that Sui is an “ideal home” for BTC-backed assets due to its parallelized execution and object-centric design based on the Move programming language.
Meanwhile, the rise in demand for BTCfi has been noticeable. Bitcoin DeFi protocols hit $6.5 billion in total value locked (TVL) by the end of 2024, the announcement notes. This figure currently stands at $5.84 billion, according to DeFiLlama.
Source: DeFiLlamaNotably, Sui says, Bitcoin has an “intentionally conservative architecture” that limits native DeFi, but Layer-2s built for this purpose have emerged. These solutions, including Stacks, enable smart contracts and decentralized applications (dapps) without altering Bitcoin’s core protocol.
This helps expand utility. “With Stacks, Bitcoin holders can put their BTC to work through lending, swapping, and liquid staking—all secured by the Bitcoin network,” the announcement says.
At the same time, Sui supports decentralized exchanges (DEXs), lending, and liquid staking within the DeFi space.
Moreover, the Sui team says that more than 10% of Sui’s total TVL is in BTC and Bitcoin-derived assets, just months after the network enabled BTC bridging and staking.
“sBTC is the safest, most decentralized path to making Bitcoin a productive asset,” said Muneeb Ali, Founder of Stacks. “Sui’s DeFi growth and powerful underlying technology make it a natural destination for sBTC.”
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