Bitlayer Partners With Sui To Bring Bitcoin To DeFi Ecosystem

Bitlayer, a Bitcoin Layer 2 based on the BitVM paradigm, has partnered with the Sui blockchain to enhance the utility of Bitcoin (BTC) within the Sui ecosystem. This collaboration involves the integration of Bitlayer’s BitVM bridge, which facilitates the launch of Peg-BTC (YBTC), a Bitcoin-backed token, on the Sui platform. This integration allows Bitcoin holders to transfer their BTC into the Sui ecosystem via the BitVM bridge, where the bridged version, Peg-BTC, can be utilized within Sui’s decentralized finance (DeFi) ecosystem to generate additional yields.

Charlie Hu, co-founder of Bitlayer, highlighted the significance of this integration, stating that while Bitcoin’s dominance as a store of value is unmatched, its utility in DeFi remains largely untapped. By integrating Bitcoin’s liquidity into Sui’s ecosystem, Peg-BTC (YBTC) empowers users to earn yield while maintaining direct exposure to BTC’s value, marking a paradigm shift for Bitcoin in the DeFi space.

BitcoinFi, the concept of allowing BTC users to earn additional yields through DeFi, was a prominent topic at the Token2049 conference. This idea was backed by Franklin Templeton, who suggested that it would enhance BTC’s appeal beyond its traditional role as a store of value.

Bitlayer is designed as a Bitcoin-security equivalent Layer 2 built on the BitVM paradigm, aiming to bring smart contract capabilities to Bitcoin without altering its core consensus. It achieves this through off-chain computation and on-chain fraud proofs, ensuring the network remains secure and decentralized. Bitlayer’s BitVM-powered zk bridge is a specialized tool that enables the safe and secure transfer of BTC onto different blockchain ecosystems without relying on centralized intermediaries, making it highly secure and decentralized.

Sui, a Layer 1 blockchain, focuses on providing high-speed and low-cost transactions through parallel processing. Its DeFi ecosystem comprises 49 projects, with over $2 billion in crypto deposits. The integration of Peg-BTC (YBTC) into the Sui ecosystem opens up various opportunities for users, including staking Peg-BTC to earn interest, lending or borrowing Peg-BTC, and trading it on decentralized exchanges within Sui to earn trading fees.

Bitlayer plans to collaborate with Sui’s top protocols, focusing on those with the highest traction in terms of total value locked, fully diluted value, and user base within the Sui ecosystem. Adeniyi Abiodun, Co-Founder and CPO at Mysten Labs, the company behind Sui, emphasized their holistic approach to catering to the growing demand for BitcoinFi. Sui is onboarding a full stack of infrastructure and BTCfi asset options, including staking, restaking, bridge integrations, WBTC, sBTC, and soon Peg-BTC (YBTC).

Abiodun noted that key integrations, such as the BitVM bridge with Bitlayer, are transforming the experience for Bitcoin holders by enabling them to earn, engage with DeFi, and put their assets to work on Sui. As of now, BTC assets comprise over 10% of the total value locked in the Sui ecosystem, with over 587 BTC flowing into DeFi since February. With support for leading BTCfi integrations, Sui’s advanced programmability activates Bitcoin’s utility, allowing users to move beyond simply holding BTC and into a secure, high-performance chain.