Bitcoin is the largest asset in crypto and, for a large share of its holders, the least productive. It sits in cold storage, in custody accounts, or on balance sheets, doing nothing. Sui, a Layer-1 blockchain, is trying to change that with Hashi, an institutional protocol that lets holders use bitcoin as loan collateral without moving it off the Bitcoin network. CoinDesk reported on Thursday that it launches with $500 million in commitments.

How Hashi works

As CoinDesk describes the design, a user locks bitcoin in a vault address on the Bitcoin blockchain. That avoids the bridging step that has caused some of crypto's worst security failures. In exchange, Hashi mints hBTC on Sui, described as a digital voucher token backed by the locked deposit. Applications on Sui can then use hBTC for lending, borrowing, credit markets, and real-world asset trading. To exit, the user burns the hBTC on Sui, and that triggers the multisig to release the original bitcoin on the Bitcoin network.

Two safeguards are layered on top. The vault is secured by a 2-of-2 multisig that requires cryptographic sign-off from both of Hashi's validators, and a separate, independent guardian layer is designed to monitor and slow suspicious collateral movements. On verification, Certora formally verified the smart contracts, and CommonPrefix reviewed the cryptography of Hashi's multi-party computation protocol, according to the report.

The $500 million, read carefully

The headline figure is capital commitments from a coalition of more than 20 industry partners. CoinDesk is careful to note these are commitments, not immediate deposits, and the stated aim is for markets to open with deep liquidity rather than starting empty. Anchorage Digital is a day-one partner and plans to supply stablecoin liquidity, according to its chief executive, Nathan McCauley. The report does not name the other members of the coalition. The mainnet will roll out in phases, with the first phase slated for later in October.

The pitch is aimed at institutions. Sui estimates that about $1 trillion in bitcoin is idle, held by institutional and corporate balance-sheet holders who lack a compliant, transparent way to put it to work in DeFi. CoinDesk adds that bitcoin-collateralized borrowing is moving beyond speculative trading, with holders taking loans for expenses like tuition, real estate, and corporate working capital. The attraction is easy to understand: borrowing against an asset you expect to keep holding avoids selling it, and avoids the tax event that may come with a sale.

The tradeoff: the coins stay put, but control may not

The phrase “without moving it off the Bitcoin network” deserves a careful read. It is true in the narrow sense that the coins remain at an address on Bitcoin. But as CoinDesk describes it, that address is controlled by the multisig of Hashi's two validators. The report does not say how many validators exist, who operates them, or whether users hold any key of their own. That distinction matters. Not moving coins and not changing who can move them are different claims, and a user's real exposure depends on the second one.

It also means the risks are not the traditional bridge risks, but they are not zero. A 2-of-2 multisig between two validators concentrates trust in those two parties. A guardian layer that can slow suspicious movements is a sensible mitigation, but it is a design choice, not a guarantee. And hBTC is a claim on the vault, which makes the integrity of the vault, the validators, and the redemption process central to whether that claim is worth par. The report does not discuss liquidation mechanics, validator concentration, or smart-contract risk beyond the audits it cites. Those are the questions to press on as the protocol goes live.

Where it fits

Hashi is one of several attempts to make bitcoin useful in DeFi without the wrapped-token structures that dominated earlier cycles, and it arrives amid renewed attention on custody failures. Our coverage of the Coldcard firmware flaw and the Liquid Network exploit showed how much value can depend on a single component. Any design that concentrates control in a small set of validators invites the same question: what happens if that set is compromised?

Why it matters

If Hashi works as described, it offers large bitcoin holders a way to borrow without selling and without handing coins to a bridge. If it works less well than described, it will be because “native” bitcoin custody is harder than the marketing suggests. Either way, the useful way to evaluate it is to ask the same two questions of any bitcoin-lending product: who can move the coins, and what happens if they are wrong or compromised. The $500 million figure tells you how much interest there is. It says nothing yet about how well the system holds up under stress. This is reporting, not a recommendation to borrow or lend.

Further reading

Frequently asked

Does Hashi mean I keep full control of my bitcoin?

Not in the sense of holding the only keys. According to CoinDesk, the bitcoin sits in a vault address on the Bitcoin blockchain secured by a 2-of-2 multisig that requires sign-off from both of Hashi's validators. The bitcoin never leaves the Bitcoin network, but control of it is shared with the protocol's validators, and the article does not say whether users hold any key themselves.

What is hBTC?

hBTC is a digital voucher token minted on Sui and backed by the bitcoin locked in the vault. Applications on Sui can use it for lending, borrowing, and credit markets. To exit, the user burns the hBTC on Sui, which triggers the multisig to release the original bitcoin on the Bitcoin network.

Is the $500 million already deposited?

No. The $500 million is capital commitments from a coalition of more than 20 industry partners, not deposits already sitting in the protocol. The intent is for markets to open with deep liquidity rather than starting empty, but commitments are promises, and actual usage will depend on what gets deployed after mainnet goes live.