Bitlayer and Sui have partnered to introduce Peg-BTC (YBTC), a Bitcoin-backed token that aims to Unlock Bitcoin DeFi on Sui’s high-speed blockchain. Announced on May 15, 2025, this integration leverages Bitlayer’s BitVM bridge to enable secure, trustless Bitcoin transactions in decentralized finance. This article explores how YBTC expands Bitcoin’s utility and strengthens the Sui ecosystem.
A New Era for Bitcoin in DeFi
The collaboration between Bitlayer and Sui marks a significant step to Unlock Bitcoin DeFi, allowing Bitcoin holders to mint YBTC, a 1:1 Bitcoin-backed token, on Sui. Using Bitlayer’s BitVM bridge, a trust-minimized, decentralized tool, users can transfer Bitcoin to Sui without intermediaries. YBTC integrates seamlessly into Sui’s DeFi protocols, enabling staking, lending, and trading while preserving exposure to Bitcoin’s value.
Sui, a Layer-1 blockchain known for low-cost, high-speed transactions, hosts a thriving Sui ecosystem with over $2 billion in total value locked across 49 DeFi projects. YBTC’s introduction enhances this ecosystem, offering Bitcoin holders new ways to generate yield. Users can stake YBTC for interest, lend it to earn returns, or trade it on Sui’s decentralized exchanges, boosting liquidity and earning fees.
Transforming Bitcoin’s Role
The initiative to Unlock Bitcoin DeFi redefines Bitcoin’s utility beyond a store of value. Charlie Hu, Bitlayer’s co-founder, emphasized that YBTC empowers users to engage in DeFi without sacrificing Bitcoin’s price exposure. This reflects rising demand for Bitcoin to serve broader financial purposes. Since February 2025, over 587 BTC have flowed into Sui’s DeFi. This amount accounts for 10% of the platform’s total value locked.
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Sui’s strategy includes integrating multiple Bitcoin-linked assets, such as WBTC and sBTC, alongside YBTC. Abiodun, a Sui representative, noted that these integrations enable Bitcoin holders to move beyond holding, leveraging Sui’s advanced programmability for secure, high-performance DeFi applications. The BitVM bridge ensures decentralized security, making YBTC a reliable option for yield-seeking investors.
Community Excitement and Market Impact
The launch of YBTC has sparked enthusiasm among crypto communities. Online discussions show excitement about expanding Bitcoin’s DeFi use. However, some users want clarity on bridge security and yield sustainability. The announcement coincides with a bullish crypto market. Altcoins have surged up to 100% amid favorable U.S. policies. This backdrop strengthens momentum for YBTC’s debut.
Conclusion
Bitlayer and Sui’s partnership to Unlock Bitcoin DeFi through YBTC and the BitVM bridge opens new opportunities for Bitcoin holders in the Sui ecosystem. By enabling staking, lending, and trading, YBTC transforms Bitcoin into a productive asset. As the DeFi protocols on Sui grow, this initiative could redefine Bitcoin’s role, driving adoption and innovation in the crypto ecosystem.