Sui to Add sBTC Support, Expanding Bitcoin DeFi Ecosystem
1min read Layer-1 network sui has announced that it will add support for sBTC, a one-to-one BTC-backed asset from Bitcoin Layer-2 chain Stacks, in the coming months. This move is set to expand the BTCfi space by allowing holders to deploy Bitcoin into decentralized finance (DeFi) via Sui’s infrastructure. Notably, the integration process will not involve any centralized custodians.
The Sui Foundation will operate a validator on the Stacks network, facilitating this partnership. The collaboration aims to unlock new onchain opportunities that preserve Bitcoin’s native security while enabling DeFi use cases such as lending, borrowing, and trading. This integration will allow Bitcoin’s $1.6 trillion in liquidity to be utilized in the DeFi ecosystem.
Ask Aime: What impact will Sui's integration with sBTC and Stacks have on the DeFi ecosystem?
sBTC support will enable developers to access this massive liquidity via a decentralized asset, allowing them to build more composable applications with rich asset behavior through Sui. This is not Sui’s first foray into the Bitcoin DeFi space; previous partnerships include Babylon, Lombard Finance, cubist, and SatLayer.
Sui aims to continue laying the foundation for the most complete Bitcoin DeFi ecosystem in crypto. The addition of sBTC will enable coin holders to repurpose their BTC and leverage Sui’s expanding DeFi ecosystem. Sui’s parallelized execution and object-centric design, based on the Move programming language, make it an ideal home for BTC-backed assets.
The demand for BTCfi has been on the rise. Bitcoin DeFi protocols hit $6.5 billion in total value locked (TVL) by the end of 2024, and this figure currently stands at $5.84 billion. Bitcoin’s intentionally conservative architecture limits native DeFi, but Layer-2 solutions like Stacks enable smart contracts and decentralized applications (dapps) without altering Bitcoin’s core protocol. This expands the utility of Bitcoin, allowing holders to put their BTC to work through lending, swapping, and liquid staking, all secured by the Bitcoin network.
Sui supports decentralized exchanges (DEXs), lending, and liquid staking within the DeFi space. Adeniyi Abiodun, Co-Founder at Mysten Lab, the contributor to Sui, noted that "sBTC activates Bitcoin liquidity in a decentralized way, unlocking Bitcoin DeFi across any ecosystem while benefiting from Stacks Signers' security." 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.
Muneeb Ali, Founder of Stacks, stated that "sBTC is the safest, most decentralized path to making Bitcoin a productive asset. Sui’s DeFi growth and powerful underlying technology make it a natural destination for sBTC." This integration is expected to further enhance the utility of Bitcoin within the DeFi ecosystem, providing new opportunities for holders and developers alike.
