New Bitcoin DeFi emerges as Bitlayer integrates its BitVM bridge with Sui to introduce Peg-BTC (YBTC), a Bitcoin-backed token unlocking decentralized finance (DeFi) potential. Announced on May 15, 2025, this collaboration enables Bitcoin holders to earn yields on Sui’s high-speed blockchain. This article explores YBTC’s mechanics, its impact, and the future of Bitcoin in DeFi.
Unlocking Bitcoin’s DeFi Potential
New Bitcoin DeFi takes a leap forward with Peg-BTC (YBTC), a 1:1 Bitcoin-backed token launched via Bitlayer’s trust-minimized BitVM bridge. This allows users to transfer BTC to Sui’s Layer 1 blockchain without centralized intermediaries, ensuring security and decentralization. Once bridged, users can use YBTC in Sui’s DeFi ecosystem. They can stake it, lend it, or trade it on decentralized exchanges. These activities generate yields. Meanwhile, users still maintain exposure to Bitcoin’s value.
Sui, known for low-cost, high-speed transactions, hosts 49 DeFi projects with over $2 billion in total value locked (TVL), per DeFiLlama. YBTC’s integration expands opportunities, letting users stake for interest, lend for profits, or provide liquidity for trading fees. Charlie Hu, Bitlayer’s co-founder, emphasized that this initiative taps Bitcoin’s unmatched liquidity for DeFi innovation, redefining its role beyond a store of value.
Strategic Collaboration and Ecosystem Growth
New Bitcoin DeFi gains momentum through Bitlayer and Sui’s partnership. Bitlayer’s BitVM bridge uses zero-knowledge proofs for secure, programmable BTC transfers, aligning with Sui’s focus on user experience and scalability. Sui’s TVL already includes over 10% BTC assets, with 587 BTC flowing into DeFi since February 2025. YBTC’s arrival amplifies this, offering yield-bearing options without compromising Bitcoin’s price exposure.
Discover: Decentralized Finance (DeFi): Mechanisms and Potential
Abiodun, a Sui spokesperson, highlighted the platform’s holistic approach, integrating staking, restaking, and assets like WBTC and sBTC alongside YBTC. This positions Sui as a hub for Bitcoin in DeFi, enabling users to engage actively rather than passively hold. The collaboration reflects growing demand for productive BTC assets in high-performance chains, driving DeFi innovation.
Community Sentiment and Market Context
The New Bitcoin DeFi initiative has sparked enthusiasm online, with users praising YBTC’s trustless design and potential to enhance BTC utility. However, some express concerns about bridge security and adoption pace. The launch aligns with a bullish crypto market, fueled by U.S. policy shifts and stable Fed rates, boosting altcoin prices by 30–100%. Bitcoin’s $2.7 trillion market cap underscores its dominance, making YBTC a timely addition to DeFi innovation.
Conclusion
New Bitcoin DeFi is redefined by Bitlayer and Sui’s launch of Peg-BTC (YBTC), bridging BTC to Sui’s DeFi ecosystem for staking, lending, and trading. With over $2 billion in Sui’s TVL and 10% BTC assets, this move unlocks Bitcoin in DeFi’s potential. As the crypto ecosystem evolves, YBTC could transform how Bitcoin holders engage, blending security with yield opportunities in a dynamic market.
