Sui Adds Bitcoin Integration

Unless you’ve been living under a crypto rock, you should know by now that Sui is on fire. A big part of this success is that the team keeps adding new features. The team just keeps delivering. Ranging from new consensus mechanisms to SuiPlay0X1. That’s the first-of-its-kind handheld gaming console. Now there’s more big news coming Sui’s way, with Bitcoin on its way to the chain.

So, let’s see how Bitcoin will integrate with Sui.

The Bitcoin Integration to Sui

This Bitcoin integration to Sui comes from Babylon Labs and Lombard Protocol. This allows Bitcoin liquidity to onboard to the Sui ecosystem. Sui’s DeFi ecosystem, in particular, will benefit from this. 

The collateral asset that Lombard Protocol uses is $LBTC. This allows Bitcoin holders to take part in Sui’s DeFi ecosystem. Instead of hodling their $BTC, they can make it work for them. This opens the floodgates for $1.9 trillion liquidity on Bitcoin to enter Sui’s DeFi ecosystem. For a non-EVM chain, that’s a massive move. 

So, you can see $LBTC as Lombard’s version of $cbBTC and what it is for Coinbase. Or wBTC for Bitgo. Like $LBTC, they are all pegged 1:1 to $BTC. $cbBTC introduces $BTC to various chains, like Ethereum, Base, and also Solana. $wBTC does the same for some EVM chains. 

It shows that many networks are eager to introduce Bitcoin’s liquidity to their DeFi ecosystems. $1.9 trillion is after all quite a lot of money. On the other hand, it’s also interesting for Bitcoin holders.

Babylon stakers will be able to earn $LBTC that is minted natively on the Sui blockchain starting in December. As already mentioned, Bitcoiners can now make their $BTC work for them. It can create passive streams of income. It allows Bitcoin holders to participate in DeFi without selling their $BTC.

Wrapped Tokens

$cbBTC and $wBTC are wrapped tokens. However, because $LBTC is an LST (Liquid Staking Token), its function is different. Wrapped tokens are a wrapped version of the original token or coin. They represent these original tokens or coins. This allows them to be on a different chain. Like $cbBTC is a wrapped version of $BTC on Ethereum, Base, or Solana. 

On the other hand, $LBTC is an LST. It’s also a wrapped token. However, it represents your staked crypto on a PoS (Proof of Stake) chain. In this case, Babylon offers PoS systems access to staking capital from Bitcoin. These can be new blockchains, like L1s and L2 rollups.

This offers both parties benefits. The Bitcoin holders can tap into DeFi. They stake their $BTC and can provide Bitcoin-backed security from its Proof of Work. The PoS chains can tap into tokens that have Bitcoin-backed security.

Wrapped Tokens v. Bridged Tokens  

Besides wrapped tokens, there are also bridged tokens. For example, $BTCB on BNB is a bridged token. Wrapped tokens need a custodian. As long as they are transparent and show that they have the required collateral, all is good. In this case, it turns out to be a safer option compared to a bridged token. 

Bridged tokens are exposed to hacks of the bridges you use. We’ve seen this too many times happen. So, having native $LBTC on Sui is a great move that opens plenty of opportunities. Suilend and similar lending and borrowing platforms on Sui, can start including $LBTC.

With $LBTC on Sui, you get to enjoy the benefits that both Bitcoin users and Sui DeFi users have. Together.

To sum up, as long as the Sui DeFi platforms offer these options for $LBTC, you can use $LBTC the same way as you have been using $SUI in DeFi. Give it a bit of time, and the Sui DeFi ecosystem will offer most or all options that you have with $SUI.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. This post is sponsored by Sui.

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