Onchain analysts report that activity in the Hashi testnet by Sui has remained high since its launch on July 22: in just three weeks, total deposit volume has exceeded 1.1 million, while withdrawals have reached 165,000.
These speeds appear to indicate early interest from retail and institutional investors in transferring native bitcoins to the Sui network without converting the asset into a synthetic token — a model that has come under close scrutiny on other chains after hundreds of millions of dollars were stolen in repeated attacks on storage-based bridges in recent years.
Hashi was first introduced by the Sui Foundation in March 2026 as a decentralized primitive designed to allow Bitcoin ($BTC) to serve as collateral in on-chain lending and borrowing markets. The project went through a closed testnet (devnet) phase before launching the current public testnet, providing developers with access to software development kits (SDKs) and integration guides ahead of the eventual mainnet launch.
Regarding the numbers, it's worth noting that 2026 has been tough for Bitcoin-related decentralized finance (DeFi): the total value locked (TVL) in second-layer BTCFi has fallen by roughly 74% compared to 2025 highs and stood at about 91,000 $BTC by mid-year. Hashi's proposal to keep $BTC in its own chain, rather than "wrapping" it, is a direct response to this skepticism, and the early deposit and withdrawal data gives Sui an argument that this approach is finding its audience despite the overall market downturn.
How Hashi Keeps Bitcoin in Its Original Form
Unlike traditional wrapped asset bridges, Hashi does not withdraw Bitcoin from the Bitcoin network. Instead, users deposit native $BTC, Sui validators confirm the transaction, and the protocol mints hBTC — a representative token that can be used as programmable collateral for institutional lending and borrowing of stablecoins, while the underlying Bitcoin remains in its own chain.
Security is based on a multi-layered architecture where deposits are protected by a "2 of 2" multi-signature, requiring signatures from protocol validators using multi-party computation (MPC) — a cryptographic scheme where no single party ever possesses the full private key.
Finally, withdrawals pass through a "Guardian Layer" — a customizable risk management system functioning as a "circuit breaker" that verifies large withdrawal requests against pre-set thresholds before confirming them. Overall, this architecture aims to avoid the single points of failure that made older cross-chain bridges vulnerable to attacks.
Institutional Investors Back the Protocol
Currently, more than 25 organizations are stress-testing the system, including storage and trading giants such as Bitgo and Cumberland, as well as Swissborg, Fluid, and Ledger. Their involvement spans trading desks, custody infrastructure, and asset management platforms, indicating demand for compliant, non-custodial ways to deploy idle bitcoins into DeFi without taking on the counterparty risk that plagued earlier "wrapped" Bitcoin-based bridges.
The protocol's revenue model relies on interest rate spreads between depositor yields and the amount paid by borrowers for Bitcoin-backed loans, rather than on inflationary token issuance to incentivize activity.
This structure mirrors the pricing approach of traditional credit desks and, in the view of Sui investors, will prove more sustainable after testnet incentives fade and real capital is deployed.
If Hashi can ultimately capture even a small share of the $1.4 trillion Bitcoin market in on-chain lending, it would become one of the most significant examples to date of interaction between the Bitcoin balance sheet and non-Bitcoin DeFi ecosystems.
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