Bitcoin Restaking Comes to Sui with SatLayer Integration

SatLayer, a Bitcoin restaking platform, announced Wednesday it’s extending Bitcoin’s use in decentralized finance to Sui, the speedy layer-1 blockchain launched last year.

With Sui’s focus on fast transaction speeds, SatLayer’s integration will enable developers to leverage Bitcoin’s $2.1 trillion footprint in building DeFi applications, which aim to exclude third parties from transactions in areas like trading and lending, SatLayer said in a statement.

Sui’s network is already home to a budding DeFi ecosystem. In 2024, 150 full-time developers worked on Sui, according to a recent report from venture firm Electric Capital. 

Looking to provide greater flexibility, Sui Foundation’s Global Head of Ecosystem, Jameel Khalfan, told Decrypt SatLayer’s introduction could broaden the set of tools developers have at their disposal.

“The combination of Bitcoin’s size and security with Sui’s speed and scalability gives developers and users new possibilities to build on Bitcoin,” he said.

SatLayer’s integration with Sui will enable developers to secure decentralized applications with Bitcoin on the layer-1, but SatLayer itself is deployed on Babylon. Babylon aims to provide security to proof-of-stake networks by offering users a yield for locking up their Bitcoin. 

Last month, SatLayer unveiled an “alliance” with Babylon Labs, positioning its restaking platform as a way to extend Babylon’s use in providing security, with a focus on decentralized applications and infrastructure, such as bridges, as opposed to just proof-of-stake networks.

The project also said that SatLayer’s integration with Babylon brings “fully programmable slashing” to the staking protocol. In restaking platforms like SatLayer, slashing refers to the penalties validators face when acting maliciously or negligently. 

Babylon’s design resembles a two-sided marketplace where users can lock up their Bitcoin in exchange for rewards while proof-of-stake networks leverage that capital to provide security.

While the project is still in its early phases, 57,300 BTC worth $6 billion has been committed to Babylon Chain so far, according to a dashboard created by Babylon Labs.

Restaking was popularized by EigenLayer last year, an Ethereum-centric protocol that effectively allows users to rehypothecate their staked Ethereum to earn additional yield elsewhere. In this sense, SatLayer parallels EigenLayer’s primary use case while focusing on Bitcoin. 

Earlier this month, Binance said it would support Babylon staking through its “On-chain Yields” product. Falling under the umbrella of Binance Earn, the company noted that supported protocols are varied, describing On-chain Yields as a high-risk product.

Babylon raised $70 million in a May funding round led by the venture capital firm Paradigm, which saw participation from Galaxy, according to CryptoRank data. SatLayer meanwhile raised $8 million in an August funding round, which saw participation from Franklin Templeton.

Edited by Sebastian Sinclair