Sui Foundation Launches Hashi Testnet with Bitcoin-Collateral Lending
The Sui Foundation and Mysten Labs have launched the testnet for Hashi, a Bitcoin-collateral protocol that enables onchain loans without wrapping or bridging bitcoin. This innovation targets a slice of bitcoin's $1.4 trillion market by providing an infrastructure for institutions to build credit markets around it.
The testnet went live on July 22, and over 25 institutional partners are already stress-testing lending and credit applications, including Bitgo, Cumberland, and Wave Digital Assets. Hashi keeps bitcoin on the Bitcoin network itself, securing deposits through a 2-of-2 multisig arrangement and tracking loan terms and collateral positions onchain for lenders' visibility.
This design aims to sidestep the risk of wrapped-btc exploits, such as the $3.5 million loss suffered by Volo Protocol in April due to an attacker compromising a vault admin's private key. Hashi also carries a tax advantage over rival designs, avoiding taxable events under U.S. tax law.