Analysts from Onchain report that activity on the Hashi testnet from Sui has remained high since its launch on July 22nd: in just three weeks, the cumulative deposit volume exceeded 1.1 million, while withdrawals reached 165,000.
These figures appear to indicate early interest from retail and institutional investors in transferring native Bitcoin to the Sui network without converting the asset into a synthetic token—a model that has come under intense scrutiny in other chains after repeated bridge attacks in recent years led to the theft of hundreds of millions of dollars from storage systems.
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 completed a closed devnet phase before launching the current public testnet, providing developers with SDKs and integration guides ahead of the eventual mainnet launch.
Regarding the numbers, it's worth noting that 2026 has been a tough year for Bitcoin-related decentralized finance (DeFi): the total value locked (TVL) in Layer 2 BTCFi fell by approximately 74% compared to 2025 highs and stood at around 91,000 $BTC by mid-year. Hashi's proposition of maintaining $BTC in its native chain, rather than "wrapping" it, is a direct response to this skepticism. The early deposit and withdrawal data gives Sui an argument that this approach is finding its audience despite the overall market downturn.
How Hashi Preserves Bitcoin in Its Original Form
Unlike traditional wrapped-asset bridges, Hashi does not move Bitcoin out of 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 on its own chain.
Security is based on a multi-layered architecture where deposits are secured by a "2-of-2" multi-signature scheme, 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 is designed to avoid the single points of failure that made older cross-chain bridges vulnerable to attacks.
Institutional Investors Back the Protocol
Currently, over 25 organizations are stress-testing the system, including custody and trading giants like 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 utilize idle Bitcoin in DeFi without taking on the counterparty risk that plagued earlier "wrapped" Bitcoin bridges.
The protocol's revenue model relies on interest rate spreads between depositor yields and the amount borrowers pay for Bitcoin-backed loans, rather than inflationary token emissions to incentivize activity.
This structure mirrors the pricing approach of traditional credit departments and, according to Sui investors, is likely to prove more sustainable once testnet incentives fade and real capital is at stake.
If Hashi ultimately manages to 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.
