The Sui Foundation has announced a strategic collaboration with Babylon Labs, Lombard Protocol, and Cubist to bring Bitcoin into the Sui ecosystem—unlocking new possibilities for decentralized finance (DeFi) and expanding the utility of the world’s largest cryptocurrency by market cap.
This partnership aims to integrate programmable Bitcoin functionality into Sui’s high-performance Layer-1 blockchain, leveraging Bitcoin’s $1.8 trillion market value and unmatched security model. By enabling Bitcoin staking on Sui, the initiative seeks to transform BTC from a static store of value into an actively used asset across DeFi applications.
Unlocking Bitcoin’s Potential on Sui
For years, Bitcoin has been hailed as “digital gold” due to its scarcity and decentralized nature. However, its limited programmability has restricted its use in dynamic financial ecosystems. This integration changes that paradigm by allowing Bitcoin holders to stake their BTC through Babylon’s staking protocol and receive LBTC—a liquid staking token—minted natively on the Sui blockchain.
Starting in December, users will be able to deposit their BTC into Babylon’s secure infrastructure, where it will be staked while maintaining full security. In return, they’ll receive LBTC, a yield-bearing asset that can be freely used within Sui’s growing DeFi landscape for lending, borrowing, trading, and more.
LBTC is not a new concept—it has already gained significant traction on Ethereum, where over $1 billion worth of BTC has been converted into LBTC. Now, with native minting on Sui, this powerful financial primitive becomes accessible to a faster, more scalable ecosystem built for performance and composability.
“Bringing BTC into Sui is a match made in heaven. Thanks to this collaboration, users from all blockchain ecosystems can come to Sui to participate in a thriving financial ecosystem in which Bitcoin will play a key role,” said Jameel Khalfan, Head of Ecosystem Development at the Sui Foundation.
By combining Bitcoin’s liquidity with Sui’s advanced smart contract capabilities, developers gain unprecedented tools to build innovative financial products. This includes cross-chain lending markets, yield aggregators, and even synthetic asset platforms—all powered by real Bitcoin collateral.
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Seamless Integration Through Cutting-Edge Infrastructure
Cubist plays a critical role in this ecosystem as the underlying infrastructure provider, ensuring smooth operations for deposits, staking, minting, and cross-chain bridging. Their modular framework enables robust interoperability between Bitcoin and Sui without compromising on speed or security.
Meanwhile, Babylon Labs—the pioneer behind native Bitcoin staking—brings its proven expertise in leveraging BTC’s consensus security for other chains. Fisher Yu, Co-founder and CTO of Babylon Labs, emphasized the broader vision:
“Babylon builds native use cases for BTC to bring Bitcoin security and liquidity to decentralized systems. We are excited to make this a reality on Sui.”
This move represents a significant step toward true multi-chain synergy, where assets aren’t just transferred but actively utilized across ecosystems. Unlike wrapped versions of BTC that rely on intermediaries, this integration maintains direct linkage to Bitcoin’s network while enabling programmability through secure delegation.
Expanding Sui’s DeFi Horizon
The introduction of LBTC positions Sui as a major player in the race to onboard real yield-generating assets into DeFi. As one of the few blockchains designed from the ground up for speed and scalability, Sui offers sub-second transaction finality and low fees—ideal conditions for high-frequency financial applications.
With LBTC as a foundational asset, Sui’s DeFi protocols can now offer competitive interest rates backed by real Bitcoin staking rewards. Lending platforms can accept LBTC as collateral, while derivatives protocols may use it to create leveraged positions or structured products.
This development also aligns with Sui’s broader mission: enhancing the real-world utility of digital assets. By making Bitcoin programmable without altering its core properties, Sui bridges the gap between preservation of value and active capital deployment.
Strategic Moves Beyond DeFi
Sui’s momentum extends beyond technical integrations. Recently, the network formed a strategic partnership with Franklin Templeton, a global investment management firm with over $1 trillion in assets under management. The collaboration explores blockchain-based solutions for traditional financial instruments, signaling strong institutional interest in Sui’s architecture.
Additionally, innovative projects like Chirp have launched the first decentralized physical infrastructure (DePIN) game on Sui, blending real-world data collection with play-to-earn mechanics. These novel use cases demonstrate Sui’s versatility beyond finance—from gaming to IoT and supply chain tracking.
However, growth hasn’t been without challenges. In late 2024, Sui experienced a temporary network outage caused by a software bug. The foundation responded swiftly, resolving the issue within hours and reinforcing its commitment to transparency and reliability.
While such incidents highlight the ongoing need for robustness in blockchain systems, they also showcase Sui’s operational maturity in handling critical events—essential for attracting enterprise-grade adoption.
Why This Matters for the Future of Blockchain
This collaboration sets a new benchmark for cross-chain innovation. Instead of merely porting assets across networks, it enables native functionality—Bitcoin staking secured by its own consensus, yet fully usable within another high-performance ecosystem.
Key benefits include:
- Capital efficiency: Users earn staking rewards while deploying LBTC across DeFi.
- Security preservation: BTC remains secured by Bitcoin’s proof-of-work network.
- Scalability: Sui handles high-throughput demands of complex financial applications.
- Interoperability: A model for how disparate blockchains can collaborate meaningfully.
As more assets become programmable across chains, ecosystems like Sui will serve as hubs for innovation—where speed, safety, and composability converge.
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Frequently Asked Questions (FAQ)
Q: What is LBTC?
A: LBTC is a liquid staking token representing staked Bitcoin. It allows holders to earn yield while retaining liquidity to use the token in DeFi applications like lending or trading.
Q: Can I unstake my BTC after receiving LBTC?
A: Yes. The Babylon protocol supports flexible staking mechanics, allowing users to unstake their BTC when needed, subject to protocol-specific unbonding periods.
Q: Is my BTC safe during staking?
A: Absolutely. Your BTC remains secured by Bitcoin’s own network. Babylon uses non-custodial methods to delegate validation rights without moving or wrapping your coins.
Q: How does Sui compare to Ethereum for DeFi?
A: Sui offers faster transaction speeds (sub-second finality), lower fees, and object-centric data modeling that enhances scalability—making it ideal for complex, high-frequency DeFi applications.
Q: When will Bitcoin staking go live on Sui?
A: The feature is scheduled to launch in December, with full integration expected shortly after.
Q: Does this affect the price of SUI?
A: While integration news can boost long-term fundamentals, short-term price movements depend on broader market conditions. As of now, SUI trades around $3.22 despite the recent announcement.
The convergence of Bitcoin’s strength and Sui’s innovation marks a pivotal moment in blockchain evolution. By unlocking programmable finance powered by real BTC collateral, this partnership opens doors for developers, institutions, and everyday users alike.
As the ecosystem matures, expect increased traction from both retail and institutional players seeking secure, scalable environments for next-generation financial applications.
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