Layer-1 blockchain Sui has announced plans to integrate sBTC, a Bitcoin-backed asset minted on the Stacks Layer-2 chain. This initiative aims to enhance the BTCfi ecosystem in the upcoming months.
According to the press release, this integration will facilitate Bitcoin holders in utilizing their assets within decentralized finance (DeFi) through Sui’s infrastructure while maintaining a completely decentralized process devoid of centralized custodians.
Additionally, the Sui Foundation is set to operate a validator on the Stacks network, reinforcing their commitment to this collaboration.
This partnership aims to unlock Bitcoin’s substantial liquidity, currently valued at approximately $1.6 trillion, thereby fostering “new on-chain opportunities that preserve the asset’s native security while enabling various DeFi functionalities such as lending, borrowing, and trading.”
sBTC is coming soon on Sui!
Holders of the 1:1 programmable Bitcoin asset can earn yield, lend, and trade their BTC via sBTC, bridging two worlds into one.
With @Stacks’ sBTC, the Sui ecosystem has even more ways to tap into the $2T in BTC liquidity for DeFi — fast,… pic.twitter.com/u6qcpTG2vX
— Sui (@SuiNetwork) May 1, 2025
Moreover, the addition of sBTC will grant developers access to vast liquidity through a decentralized asset. The integration will also enable the creation of “more composable applications with rich asset behavior,” as stated in the announcement.
Sui has previously engaged in the Bitcoin DeFi space through partnerships with notable projects such as Babylon, Lombard Finance, Cubist, and SatLayer.
Sui asserts its dedication to establishing a robust Bitcoin DeFi ecosystem. The inclusion of sBTC is seen as a pivotal advancement, allowing holders to “repurpose” their BTC and take advantage of Sui’s growing DeFi landscape.
Furthermore, the Sui team emphasizes that Sui serves as an “ideal home” for BTC-backed assets, owing to its parallelized execution capabilities and object-centric design based on the Move programming language.
The demand for BTCfi has notably surged, with Bitcoin DeFi protocols achieving a total value locked (TVL) of $6.5 billion by the close of 2024, which currently stands at approximately $5.84 billion, as reported by DeFiLlama.
Source: DeFiLlama
Sui highlighted that Bitcoin’s “intentionally conservative architecture” limits native DeFi capabilities. However, Layer-2 solutions like Stacks have emerged, facilitating smart contracts and decentralized applications (dApps) while preserving Bitcoin’s core protocol.
This innovation enhances Bitcoin’s utility, enabling holders to engage in lending, swapping, and liquid staking—all secured by the Bitcoin network, as mentioned in the announcement.
At the same time, Sui is equipped to support decentralized exchanges (DEXs), lending, and liquid staking features within the DeFi realm.
As Adeniyi Abiodun, Co-Founder at Mysten Labs, a contributor to Sui, stated:
“Up to now, BTC has been treated as an idle asset”
“sBTC activates Bitcoin liquidity in a decentralized way, unlocking Bitcoin DeFi across any ecosystem while benefiting from Stacks Signers’ security”
— stacks.btc (@Stacks) May 1, 2025
Moreover, the Sui team reports that over 10% of the total TVL in Sui is now represented by BTC and Bitcoin-derived assets, only months after the network enabled BTC bridging and staking functionalities.
“sBTC is the safest, most decentralized path to making Bitcoin a productive asset,” remarked Muneeb Ali, Founder of Stacks. “Sui’s DeFi growth and its powerful technology make it a natural destination for sBTC.”
Sui to Add Support for Stacks’ sBTC, BTCfi Holds $5.8 Billion in TVL appeared first on Finance Newso.
