Sui Network just dropped the Hashi testnet, and its pitch is straightforward: let Bitcoin do more without asking Bitcoin holders to give up custody of their coins. The system enables native BTC to function as collateral for lending, borrowing, and credit markets, all while the underlying Bitcoin stays parked on its own blockchain.
What Hashi actually does
At its core, Hashi is a decentralized Bitcoin collateralization system. It allows users to pledge their BTC as collateral and access DeFi products built on Sui, without requiring the Bitcoin to be wrapped, bridged in the traditional sense, or otherwise moved into a custody arrangement that strips away Bitcoin’s native security guarantees.
The security architecture centers on something called the Guardian Layer. This employs a 2-of-2 multisig mechanism that combines Hashi validators with separate guardians. In English: two independent parties both have to sign off on any transaction, which means no single entity can run off with funds.
For institutional users, the system layers on threshold signatures as an additional safeguard. The whole design philosophy leans heavily toward what the project calls “low trust environments,” relying on Sui validators and verified smart contracts rather than centralized intermediaries.
The platform also incorporates real-time oracles and automatic collateral management. Oracles feed live price data into the system so collateral ratios stay accurate. Automatic management means if a position gets dangerously close to liquidation, the system can act without waiting for a human to notice.
The partnership roster and institutional credibility
Hashi didn’t launch in a vacuum. Over 25 partners across custody, liquidity, and DeFi protocols have signed on. Wave Digital Assets is leading the charge on day one, with plans to offer Bitcoin-yield products through the platform.
SwissBorg, Cumberland, Fluid, BitGo, and Ledger all announced their involvement shortly before the testnet went live.
Law firm Fenwick issued a legal opinion determining that deposit and redemption processes within Hashi would not trigger taxable events under US law. That’s a big deal. One of the persistent headaches with wrapped Bitcoin products like wBTC has been the tax ambiguity around wrapping and unwrapping. If Fenwick’s interpretation holds, Hashi removes a meaningful friction point for American users and institutions.
The project was first introduced back in March 2026 and went through a devnet development phase before reaching this testnet milestone. Developers now have access to SDKs and integration guides to start building ahead of an eventual mainnet transition.
Coinbase enters the SUI staking game
Coinbase announced it would provide staking services for SUI, the native token of the Sui network, right alongside the Hashi testnet launch.
What this means for investors
Hashi’s bet is that the problem isn’t demand. It’s trust. Bitcoin holders have historically been reluctant to bridge their assets onto other chains because doing so introduces counterparty risk, smart contract risk. By keeping BTC on its native chain while still unlocking its utility as collateral, Hashi attempts to thread a needle that previous Bitcoin DeFi efforts have struggled with.
The competitive landscape is also worth watching. Sui isn’t the only network trying to bring Bitcoin into DeFi. Stacks, Babylon, and several other projects are pursuing similar goals with different technical approaches.
The Fenwick tax opinion could prove to be Hashi’s quiet superpower. In a market where regulatory clarity is scarce, having a credible legal framework that eliminates tax friction gives Hashi a tangible advantage over alternatives that haven’t addressed the issue.