Starting in December, Bitcoin holders will be able to stake their BTC on Babylon, a Bitcoin layer-2 (L2) network, through the Sui blockchain. This marks a significant step in integrating Bitcoin liquidity with Sui’s decentralized finance (DeFi) ecosystem.
Liquid Bitcoin Staking on Sui
Sui and Babylon Labs, in collaboration with Lombard Protocol, announced the launch of liquid Bitcoin staking on November 25. Bitcoin holders will stake BTC on Babylon to mint LBTC, Lombard’s liquid staking token (LST). LBTC will function as a core asset in Sui’s DeFi ecosystem, enabling lending, borrowing, and trading while unlocking Bitcoin’s $1.8 trillion liquidity potential.
Bitcoin LSTs by TVL. Source: stakingrewards.com
The initiative is expected to attract Bitcoin holders by offering enhanced utility for their BTC holdings.
Expanding DeFi Opportunities
The integration seeks to grow Sui’s DeFi ecosystem by onboarding Bitcoin liquidity. “Bitcoin’s $1.8 trillion market capitalization represents immense untapped potential,” said Jacob Phillips, co-founder of Lombard Protocol.
Cubist, a blockchain development firm, will create the necessary infrastructure for depositing, minting, staking, and bridging BTC to Sui. The goal is to allow Bitcoin holders to participate in next-generation on-chain finance without compromising security or liquidity.
Sui’s Growing Ecosystem
Launched in 2023, Sui is a layer-1 blockchain known for high-performance decentralized applications. It has already accumulated approximately $1.4 billion in total value locked (TVL), according to DefiLlama. Dubbed a “Solana killer,” Sui’s integration with LBTC aims to further cement its position in the blockchain space.
Source: DefILlama
Bitcoin LSTs, which represent tokenized claims on staked Bitcoin, currently command a TVL of $4.5 billion across networks like CoreChain and Babylon. Lombard’s LBTC is already the largest LST on Babylon, while other Bitcoin LSTs like SolvBTC offer yields up to 1.2% APR.
This collaboration positions Sui to tap into Bitcoin’s vast liquidity, potentially reshaping its DeFi ecosystem and offering new opportunities for Bitcoin holders.
