YBTC, the Bitcoin-backed token, arrives on the Sui network thanks to Bitlayer’s BitVM bridge integration.

Bitcoin holders can now leverage their assets to earn yield within the Sui blockchain ecosystem, thanks to the launch of Peg-BTC (YBTC), a Bitcoin-backed token enabled through Bitlayer’s BitVM bridge integration.

The collaboration between Bitlayer—a Bitcoin Layer 2 platform built on the BitVM protocol—and Sui allows users to transfer BTC onto Sui, converting it into Peg-BTC. This bridged token can then be used across Sui’s expanding decentralized finance landscape for staking, lending, borrowing, and trading.

“Bitcoin remains the gold standard for value storage, but its DeFi potential has been largely untapped,” said Charlie Hu, co-founder of Bitlayer. “Peg-BTC unlocks new utility by enabling BTC holders to earn yield while keeping direct Bitcoin exposure.”

BitcoinFi, the practice of earning DeFi yields with Bitcoin, was a major highlight at the Token2049 conference in Dubai, where industry leaders like Franklin Templeton underscored its promise.

Bitlayer’s BitVM-based solution enhances Bitcoin’s smart contract capabilities without modifying its consensus, using off-chain computations and on-chain fraud proofs to maintain security and decentralization. The BitVM-powered zero-knowledge bridge ensures trust-minimized BTC transfers across blockchains.

Sui, a Layer 1 chain optimized for speed and low fees via parallel processing, currently supports 49 DeFi projects with over $2 billion in crypto deposits, according to DeFiLlama.

The introduction of Peg-BTC enables a variety of yield-generating activities, including staking Peg-BTC for interest, lending it out, using it as loan collateral, and trading on decentralized exchanges, allowing users to capitalize on trading fees and liquidity provision.

Bitlayer is set to collaborate with Sui’s leading protocols, focusing on projects with significant TVL and user activity to maximize Peg-BTC’s adoption.

Adeniyi Abiodun, co-founder and CPO of Mysten Labs, said, “We are building a full BitcoinFi infrastructure on Sui—staking, restaking, bridge integrations, wrapped BTC tokens like WBTC and sBTC, and soon Peg-BTC—to meet growing demand for Bitcoin use cases beyond simple holding.”

BTC-related assets currently make up over 10% of Sui’s total value locked, with more than 587 BTC flowing into DeFi since February. “Our programmability combined with BitcoinFi integrations empowers users to actively deploy their Bitcoin on a high-performance, secure blockchain,” Abiodun added.