In a recent announcement on November 25, Babylon Labs and Lombard Protocol revealed plans to introduce liquid Bitcoin staking to the burgeoning layer-1 blockchain network, Sui. This move is set to commence in December, enabling Bitcoin holders on Sui to stake their BTC on Babylon, a Bitcoin layer-2 (L2) network, and mint LBTC, Lombard’s liquid staking token (LST).
Aims of the Initiative
The primary objective of this initiative is to onboard Bitcoin liquidity to the Sui ecosystem, thereby growing the decentralized finance (DeFi) ecosystem with LBTC as a collateral asset. Additionally, it aims to invite Bitcoin holders to explore more opportunities with their Bitcoin via LBTC.
According to Sui and Babylon, "LBTC will become a core asset in Sui’s DeFi ecosystem, enabling lending, borrowing, and trading to unlock Bitcoin’s $1.8 trillion USD worth of liquidity on Sui."
Unlocking Bitcoin’s Potential
Bitcoin LSTs (Liquid Staking Tokens) by TVL
| LST | TVL |
| — | — |
| Solv BTC (SolvBTC) | ~$1.5 billion |
| Lombard | ~$1 billion |
| Other Bitcoin LSTs | ~$4.5 billion |
Infrastructure and Collaboration
Cubist, a blockchain developer, will build the necessary infrastructure for depositing, minting, staking, and bridging BTC to Sui. This collaboration aims to facilitate "a future where Bitcoin holders can fully participate in the next generation of onchain finance without compromising security or liquidity," said Jacob Phillips, Lombard’s co-founder.
Sui Blockchain Network
Launched in 2023, Sui has attracted approximately $1.4 billion in total value locked (TVL), according to data provided by DefiLlama. Dubbed a Solana killer, Sui specializes in high-performance decentralized applications (DApps).
Bitcoin LSTs Market Overview
Bitcoin’s $1.8 trillion market capitalization represents immense untapped potential for the blockchain ecosystem. Currently, Bitcoin LSTs command some $4.5 billion in TVL, with Solv BTC (SolvBTC) being the most popular among them, holding around $1.5 billion in TV.
Benefits of Liquid Staking
Liquid staking tokens allow users to participate in DeFi activities while maintaining control over their underlying assets. These tokens can be used as collateral for lending and borrowing, enabling users to unlock the full potential of their Bitcoin holdings.
Conclusion
The introduction of liquid Bitcoin staking to Sui blockchain network marks a significant step towards expanding the decentralized finance ecosystem. With the support of Cubist and Lombard Protocol, this initiative aims to onboard Bitcoin liquidity and invite more users to explore DeFi opportunities.
Related Resources
- Bitcoin yield opportunities are booming — Here’s what to watch for
- Cubist seeks to facilitate ‘a future where Bitcoin holders can fully participate in the next generation of onchain finance without compromising security or liquidity,’ he added.
- DefiLlama – Sui Blockchain Network
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