The rapidly evolving area of Bitcoin-based decentralized finance (BTCFi) has emerged as a new frontier in cryptocurrency, and leading that frontier is one blockchain in particular: Sui Network.

Today, an ecosystem of Sui has been formed with more than 2,700 BTC—amounting to approximately $300 million in total value locked (TVL)—bridged to it. From where I sit, that’s a happening DeFi platform.

The rising activity of BTCFi in Sui clearly shows the climb of Sui as a developer, investor, and user-friendly destination for sophisticated financial instruments built around Bitcoin. The Sui ecosystem now supports many such instruments, from Bitcoin liquid staking to decentralized lending. What makes them and the ecosystem so special? We tried to find out.

Why Sui is Built for BTCFi

Sui prioritizes speed, efficiency, and scalability, offering infrastructure particularly tuned to Bitcoin. It has one core feature and just two others:

1. Parallel execution. This is the big one. With most blockchains, if you have a bunch of transactions that absolutely must be processed together, they can only be processed one after the other. Three cheers for the first three transactions in line and the next three in line after those! But if your transactions can be processed in parallel, then a whole bunch of them can be handled at once. This is a big boost for Sui, because in practice, a lot of BTC transfers can be handled in this way and don’t need to be sequenced.

Another significant function is trustworthy interoperability that’s not reliant on a centralized authority. This allows for sufficient and secure transference of Bitcoin into the Sui ecosystem, in a manner that doesn’t require (or permit us to rely on) a large amount of centralized custody. This reduces security risks and is much more in line with the decentralized ethos of Bitcoin and DeFi.

On Sui, the management of BTC assets benefits from the added safety and performance offered by Move smart contracts. These smart contracts underpin a wide array of decentralized financial services, high-reliability services that range almost to the limit of what can be imagined in terms of lending, borrowing, and just-plain-finance.

Sui also provides exceptional capital efficiency, which enables Bitcoin holders to carry out a diverse array of yield-generating activities—staking and lending, for instance. This presents unprecedented opportunities for users to make their BTC holdings perform in progressively inventive and increasingly flexible fashions.

The BTCFi Supply Breakdown on Sui

The Bitcoin Financial ecosystem on Sui has an assorted arrangement of Bitcoin-pegged assets, which increasingly lets it show the maturity and depth it has. Right now, three key assets are in charge of most of the supply:

BitGo’s wBTC accounts for 38.52% of BTC on Sui. It is a well-known and well-trusted wrapped Bitcoin asset, and it is frequently used to bring liquidity into DeFi.

38.11% of the supply is held by stBTC from Lorenzo Protocol. This asset supports staking features, allowing users to earn yield on their BTC.

Lombard Finance’s LBTC accounts for 23.30% and is a newer, more innovative use of Bitcoin liquidity and usage in DeFi.

This distribution indicates a pleasing equilibrium between regulated expressions of wrapped BTC and bleeding-edge setups that aim to realize, in full, the unrealized potential of Bitcoin in DeFi.

A Thriving Ecosystem Driving BTCFi Innovation

The BTCFi space is not just technically strong; it is also backed by a community of varied protocols and partners of diverse sorts. Together, these two groups give Suis an awful lot of positive momentum.

The network’s foundation lies in its infrastructure platforms, such as babylonlabs_io, ikadotxyz, redstone_defi, axelar, and LayerZero_Core. They allow for secure communication across the network’s many chains and enable efficient data flow from one part of the network to another. In the successful integration of Bitcoin with Sui’s DeFi protocols, this network inside the next work plays a crucial part.

When it comes to liquid staking and restaking, companies like Lombard Finance, FunctionBTC, and Satlayer are nearly uncharted territory for the average Bitcoin user. FunctionBTC is a project that uses Bitcoin to create computational proofs that secure the Bitcoin network, and it offers yield for doing so. Lombard Finance and Satlayer both use Bitcoin as collateral to create staking derivatives that help users earn yield. Yet, the average Bitcoin holder will find it difficult to access any of these seemingly straightforward yield-generating services.

Cubistdev, Phantom, Backpack, Suiet_wallet, and Wallet are not custodians of BTCFi, but they help us operate it.

They are safe, reliable, and user-friendly. None of them would make the custodial mistake of holding user assets on their behalf. Please do not ask them to.

Sui’s DeFi offerings keep broadening with applications such as goNativeCC, suilend protocol, navi_protocol, AftermathFi, bluefin app, Cetus Protocol, and Scallop_io. They deliver services like these:

– goNativeCC: Decentralized trading.

– suilendprotocol: Decentralized lending.

– navi_protocol: Asset management.

And there are more applications to El Salvador Protocol!

Looking Ahead

Positioning itself as a key player in the BTCFi movement, Sui Network has nearly $300 million in total value locked, and a rapidly growing ecosystem. With a combination of innovative technology, and assets as diverse as their community-driven development, they have a strong foundation for continued growth.

With an uptick in acceptance and a corresponding inflow of BTC into its network, Sui looks to be stepping to the forefront of the next phase of Bitcoin’s DeFi evolution, providing a safe and scalable abode for BTC-centric financial applications.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Filed under: Bitcoin - @ May 15, 2025 4:24 am