Sui to enable Bitcoin staking through Babylon network
Starting in December, the Sui (CRYPTO:SUI) blockchain network will allow Bitcoin (CRYPTO:BTC) holders to stake their BTC on Babylon, a Bitcoin Layer 2 (L2) network.
This initiative is a collaboration between Sui, Babylon Labs, and Lombard Protocol, aiming to enhance decentralised finance (DeFi) capabilities on Sui.
Through this initiative, Bitcoin holders can mint LBTC, Lombard Protocol’s liquid staking token (LST).
“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,” according to the announcement.
Cubist, a blockchain development firm, is set to build the infrastructure necessary for depositing, minting, staking, and bridging Bitcoin to Sui.
"Bitcoin's $1.5 trillion market cap represents immense untapped potential," stated Jacob Phillips, co-founder and head of strategy at Lombard.
Sui, launched in 2023, has already reached $1.4 billion in total value locked (TVL), according to DefiLlama.
It has positioned itself as a high-performance platform for decentralised applications (DApps).
Bitcoin LSTs, which are tokenised claims on staked Bitcoin, have gained traction in the DeFi space, with a combined TVL of approximately $4.5 billion.
Lombard’s LBTC is one of the leading LSTs, holding $1 billion in TVL on Babylon.
Stakers in Bitcoin L2 networks, similar to proof-of-stake systems, lock BTC as collateral to secure networks and earn rewards.
While Lombard’s LBTC has yet to distribute staking rewards, comparable offerings like SolvBTC on CoreChain offer an annual percentage rate (APR) of 1.2%.
At the time of reporting, the Sui (SUI) price was $3.24, and the Bitcoin (BTC) price was $94,663.57.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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