Sui and Bitlayer Launch Bitcoin-Pegged YBTC with BitVM Bridge, Expanding DeFi and BTCFi Integration

Published: 2025-05-16 04:03:03 |

Sui, a leading Layer 1 blockchain, has partnered with Bitcoin Layer 2 network Bitlayer, which uses BitVM technology, to launch a trust-minimized Bitcoin bridge called BitVM Bridge. This collaboration introduces the Bitcoin-pegged token YBTC (Peg-BTC), allowing Bitcoin holders to bridge BTC onto the Sui network and mint YBTC, which can be used in a variety of DeFi applications, including staking, lending, borrowing, serving as collateral, and trading on decentralized exchanges. BitVM Bridge leverages zk cross-chain technology for enhanced security, eliminating the need for centralized intermediaries. Sui’s DeFi ecosystem, with over $2 billion in total value locked (TVL) and 49 active projects, is set to benefit from this expanded cross-chain liquidity and integration, positioning Sui and Bitlayer at the forefront of the growing BitcoinFi (BTCFi) trend. The BitVM Bridge is in its final testing phase, with a mainnet launch expected soon, and has established partnerships across seven major chains, marking a significant step for interoperability and for transforming Bitcoin from a passive store of value to an active DeFi asset. The move has garnered attention from institutional players such as Franklin Templeton, reflecting rising demand and institutional support for Bitcoin-based DeFi solutions.

Bullish

The integration of Bitcoin-pegged YBTC on the Sui blockchain via BitVM Bridge creates new utility for Bitcoin, expanding its use in DeFi applications such as staking, lending, and asset trading. This development strengthens cross-chain liquidity, enhances Sui’s DeFi ecosystem, and positions both Sui and Bitlayer as key players in the emerging BTCFi sector—a growing narrative supported by institutional interest. The mainnet launch of BitVM Bridge and partnerships across major chains suggest a broader shift of Bitcoin from a passive asset to an active participant in DeFi. Historically, such integrations provide a positive signal for related assets, driving user adoption, increasing on-chain activity, and supporting potential price appreciation, especially for BTC and Sui ecosystem tokens.