Bitcoin DeFi: Sui Integrates sBTC and Stacks to Boost Institutional BTCfi Use Cases

Key Takeaways:

• Sui’s integration of sBTC enables non-custodial Bitcoin DeFi via Stacks’ Bitcoin-backed tokens.
• Over 10% of Sui’s Total Value Locked (TVL) of $580M is now Bitcoin or BTC-derived assets, per DefiLlama data.
• Partnerships with Babylon and SatLayer aim to expand Bitcoin (BTC) restaking and institutional tools.

Sui Emerges as Bitcoin’s DeFi Powerhouse

Sui, a high-speed Layer 1 blockchain, has announced support for sBTC – a decentralized, Bitcoin-pegged asset from Stacks – marking a strategic push to dominate Bitcoin decentralized finance (BTCfi). The integration, slated for Q3 2025, allows Bitcoin (BTC) holders to engage in lending, trading, and yield farming on Sui without relinquishing custody, tapping into its $5.9B DeFi ecosystem.

sBTC is coming soon on Sui!

Holders of the 1:1 programmable Bitcoin asset can earn yield, lend, and trade their BTC via sBTC, bridging two worlds into one. 🟧

With @Stacks' sBTC, the Sui ecosystem has even more ways to tap into the $2T in BTC liquidity for DeFi — fast,… pic.twitter.com/u6qcpTG2vX

— Sui (@SuiNetwork) May 1, 2025

Bridging Bitcoin’s $1.6T Liquidity with Sui’s Speed

sBTC, a 1:1 Bitcoin-backed asset minted via Stacks’ Bitcoin Layer 2, eliminates reliance on centralized bridges. By porting sBTC to Sui, users gain access to:

• Near-instant transactions: Sui’s parallel execution processes 297,000 TPS, dwarfing Ethereum’s 15 TPS.
• Low fees: Average swaps cost under $0.01, critical for institutional arbitrage strategies.
• Composability: sBTC integrates natively with Sui’s decentralized exchanges (DEXs) like Cetus and lending protocols.

Bitcoin is no longer a dormant asset. sBTC on Sui merges Bitcoin’s security with DeFi’s innovation, all without intermediaries.

Sui is integrating Stacks and sBTC into its ecosystem.

With sBTC, @SuiNetwork gains access to a decentralized, secure, and programmable Bitcoin asset.

Integrations like this are making Stacks and sBTC a growing hub for the Bitcoin economy. ⬇️ pic.twitter.com/3l3BDqSDw8

— stacks.btc (@Stacks) May 1, 2025

Why Institutions Are Betting on BTCfi

BTCfi – DeFi applications leveraging Bitcoin’s liquidity – has surged to a $6.5B market, driven by demand for yield on the world’s largest crypto asset. Sui’s institutional appeal lies in its object-centric architecture, which optimizes for asset ownership and compliance – a key factor for TradFi entrants.

Recent partnerships highlight this shift:

• Babylon: Enables Bitcoin staking as collateral on Sui.
• SatLayer: Facilitates Bitcoin restaking for cross-chain security.
• Lombard Finance: Develops liquid BTCfi derivatives for hedge funds.

The Stacks Synergy: Smart Contracts Meet Bitcoin

Stacks, a Bitcoin Layer 2, brings programmable smart contracts to Bitcoin without altering its core protocol. By integrating sBTC, Sui positions itself as a scalability layer for Bitcoin-centric apps, combining Stacks’ security with its own throughput.

Sui’s tech stack is tailor-made for mass-market BTCfi. This isn’t just scaling, it’s redefining Bitcoin’s utility.

Will Sui Outpace Ethereum in BTCfi?

Sui’s sBTC play challenges Ethereum’s dominance in Bitcoin wrappers (e.g., WBTC). With 10% of its TVL already Bitcoin-linked, Sui could attract institutions seeking speed and regulatory clarity. Yet risks persist: regulatory scrutiny of wrapped assets and Ethereum’s entrenched ecosystem loom large.

As BTCfi matures, one question remains: Can Sui’s tech-first approach convert Bitcoin’s $1.6T liquidity into the DeFi future it envisions? For now, the race to unlock Bitcoin’s potential is just heating up.