Babylon Labs and Lombard Protocol are preparing to bring liquid Bitcoin ( BTC ) staking to Sui, the burgeoning layer-1 blockchain network, Sui and Babylon disclosed on Nov. 25.

Starting in December, Bitcoin holders on Sui will be able to stake BTC to Babylon, a Bitcoin layer 2 (L2) network, and mint LBTC, Lombard’s liquid staking token (LST), according to the announcement.

The initiative “aims to onboard Bitcoin liquidity to the Sui ecosystem, growing the decentralized finance ecosystem with LBTC as a collateral asset, and inviting Bitcoin holders to do more with their Bitcoin via LBTC,” Sui and Babylon said.

They said 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.”

Sui to launch Bitcoin staking image 0

Bitcoin LSTs by TVL. Source: stakingrewards.com

Related: Bitcoin yield opportunities are booming — Here’s what to watch for

Cubist, a blockchain developer, will build infrastructure for depositing, minting, staking, and bridging BTC to Sui.

“Bitcoin’s $1.8 trillion market capitalization represents immense untapped potential,” Jacob Phillips, Lombard’s co-founder, said in a statement.

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.

Launched in 2023, Sui has attracted approximately $1.4 billion in total value locked (TVL), according to data provided by DefiLlama.

Dubbed a Solana ( SOL ) killer, Sui specializes in high-performance decentralized applications (DApps).

Sui to launch Bitcoin staking image 1

Source: DefILlama

Bitcoin LSTs command some $4.5 billion in TVL, according to stakingrewards.com . At around $1.5 billion in TV, Solv BTC (SolvBTC) is the most popular among Bitcoin LSTs. It is followed by Lombard, with a TVL of approximately $1 billion.

Bitcoin LSTs are tokenized claims on Bitcoin staked to L2s, including CoreChain and Babylon.

Similar to proof-of-stake (PoS) networks such as Ethereum, Bitcoin L2 stakers lock up BTC as collateral to secure the networks in exchange for rewards. 

Lombard’s LBTC is the largest LST on Babylon, which has yet to start distributing staking rewards.

Other Bitcoin LSTs are already earning yield. SolvBTC earns some 1.2% APR from staking Bitcoin on CoreChain.

On Oct. 17, Solv Protocol launched a Bitcoin LST on Solana in a bid to woo BTC holders as yield opportunities proliferate for the digital currency.

Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex