Sui Network has launched the Hashi testnet, allowing Bitcoin to function as programmable collateral on its blockchain without the security risks of traditional token bridges. The rollout, announced in June for a July 2026 deployment, introduces a "Guardian Layer" security model that uses a 2-of-2 multisig requirement between Hashi validators and independent guardians to protect user funds.
Hashi was first proposed in March as a way to unlock institutional lending and borrowing against Bitcoin's roughly $1 trillion in market cap without moving it off the Bitcoin Network. Rather than wrapping Bitcoin through a bridge, a mechanism that has been a persistent attack vector in crypto finance, Hashi uses a dual-signature custody model where no single party can move funds unilaterally. The testnet marks the first live deployment of the technical infrastructure needed to support that architecture.
The mechanism works by keeping Bitcoin on its native chain while creating a programmable representation on Sui that can serve as collateral for loans, credit facilities, and other DeFi operations. Institutions can deposit Bitcoin into a Hashi address, receive a corresponding on-chain asset, and use that asset to borrow stablecoins or other tokens from lending protocols built on Sui. The design documentation details how the multisig scheme distributes control between Hashi's validator network and an independent guardian set to eliminate single points of failure.
Bridge hacks have extracted more than $2 billion in user funds across crypto since 2021, according to security firm Chainalysis. High-profile incidents include the Ronin bridge collapse in March 2022, which cost users $625 million, and the Poly Network hack in August 2021, which resulted in $611 million in losses. Hashi's approach sidesteps bridging by keeping Bitcoin on its origin blockchain instead.
Sui's announcement of the Hashi testnet notes that the network is coordinating with institutional partners and independent guardians to operationalize the validator and guardian sets required for the mainnet rollout. The foundation did not specify a timeline for moving Hashi from testnet to production or for which lending protocols would integrate it first.
The testnet launch places Sui among a growing set of Layer 1 networks seeking to capture Bitcoin finance activity without relying on wrapped assets or custodial bridges. Stacks uses a proof-of-work consensus model tied directly to Bitcoin settlement, while platforms like Merlin and BOB integrate Bitcoin through alternative custody schemes. Sui's testnet achievement narrows the gap between these competing approaches to one working implementation.
If Hashi reaches mainnet before the end of 2026 and onboards at least two major lending protocols, it would become the first production Bitcoin finance layer to operate at scale without bridge infrastructure. The calendar and the protocol adoption rate are the metrics that will determine whether Sui's model becomes institutional standard or remains a niche technical experiment.
