Sui Launches Hashi Testnet to Develop Institutional-Grade Bitcoin Finance

Hashi, a new infrastructure project for building financial applications with native Bitcoin, has launched its testnet on the Sui blockchain. The initiative aims to provide the tools for developers and financial institutions to create onchain credit markets for what is currently a largely dormant asset class with a market capitalization of over $1 trillion.

Testnet Launch and Objectives

The testnet's launch on July 22 allows builders, custodians, and ecosystem partners to begin integrating and stress-testing Bitcoin-backed decentralized finance (DeFi) applications before the mainnet goes live. The project's stated goal is to enable the use of native BTC in transparent and programmable markets for lending, borrowing, and yield generation.

According to a legal analysis by Fenwick, a law firm specializing in digital assets, Hashi’s deposit and redemption mechanics should not be considered taxable events under current U.S. tax law, addressing a key concern for institutional participants.

A Focus on Institutional Security

A key component unveiled with the testnet is the Guardian Layer, a security architecture designed to meet institutional requirements. According to the announcement, this layer uses a 2-of-2 multisig protocol requiring signatures from both Hashi validators and a designated guardian, adding a layer of protection for collateral movements and large transactions.

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"Every major asset class eventually develops deep credit, lending, and liquidity markets," said Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs, the original contributor to Sui. "Hashi is giving developers the infrastructure to build those markets onchain with the security, transparency, and programmability institutions have been waiting for."

Ecosystem and Market Context

The project launches with support from over 25 partners across the digital asset ecosystem. Key participants include:

• Custody and Wallets: BitGo, Ledger, Fordefi (by Paxos), and Cobo.
• Liquidity and Trading: Bullish, Cumberland, and FalconX.
• DeFi Protocols: Navi, Scallop, and Suilend.
• Asset Management: Wave Digital Assets, which has committed to prioritizing the tokenization of Bitcoin-yield-bearing bond products on Sui using Hashi.

With the testnet now active, developers can access technical documentation to begin building, as the project moves toward a full mainnet launch.