Bitlayer and the Sui blockchain have joined forces to unlock new DeFi opportunities for Bitcoin holders through the launch of Peg-BTC (YBTC), a Bitcoin-backed token native to the Sui ecosystem.

By integrating Bitlayer’s BitVM bridge, Sui enables BTC holders to seamlessly transfer Bitcoin onto its platform, minting Peg-BTC (YBTC) in the process. This bridged token can then be utilized within Sui’s rapidly growing decentralized finance ecosystem to generate yield, expanding Bitcoin’s utility beyond a mere store of value.

“While Bitcoin remains the dominant store of value, its participation in DeFi has been limited,” said Charlie Hu, Bitlayer’s co-founder. “Peg-BTC unlocks the ability to earn yield while maintaining exposure to Bitcoin, representing a significant advancement in BitcoinFi.”

The concept of BitcoinFi—using Bitcoin to earn returns in DeFi—gained significant traction at the Token2049 conference in Dubai, with support from prominent institutional players such as Franklin Templeton.

Bitlayer’s solution leverages the BitVM paradigm to introduce smart contract capabilities to Bitcoin without altering its core consensus. Its BitVM-powered zero-knowledge bridge offers a trust-minimized, decentralized method for securely moving BTC across blockchain ecosystems, bypassing the need for centralized intermediaries.

Sui is a Layer 1 blockchain designed for high throughput and low-cost transactions, boasting a DeFi ecosystem with 49 active projects and over $2 billion in deposits, per DeFiLlama data.

With the introduction of Peg-BTC, users on Sui can engage in staking, lending, borrowing, and trading within the network’s DeFi protocols. This broadens options for BTC holders to maximize yield while participating in Sui’s ecosystem.

Bitlayer plans to partner with leading Sui protocols to deepen Peg-BTC adoption, focusing on projects with strong total value locked and user engagement.

Adeniyi Abiodun, Co-Founder and CPO of Mysten Labs, the company behind Sui, emphasized the network’s comprehensive approach to integrating BitcoinFi assets. “Sui is building a full suite of infrastructure and asset options including staking, restaking, bridge integrations, and wrapped Bitcoin tokens, with Peg-BTC arriving soon to complement these offerings.”

Abiodun highlighted that BTC assets already represent over 10% of Sui’s total TVL, with more than 587 BTC entering the DeFi space since February. “Our advanced programmability combined with robust BitcoinFi integrations empowers users to put their Bitcoin to work on a secure, efficient platform,” he said.