This morning the Sui Foundation announced their collaboration with Cubist, <a href="https://babylonlabs.io/" target="_blank">Babylon</a>, and <a href="https://www.lombard.finance/" target="_blank">Lombard</a> to make Bitcoin liquidity available in Sui’s DeFi ecosystem.<br> <br> ## LBTC is coming soon to Sui<br> <br> Together with Lombard, we have been extending the CubeSigner hardware-backed key management platform to bring smart contract capabilities to Bitcoin and unlock Bitcoin liquid staking across DeFi.<br> <br> Today, CubeSigner powers (1) <a href="/blog/new-key-management-workflows-for-babylon-btc-staking" target="_blank">non-custodial Babylon staking</a> and decentralized governance for the more than $1B of Bitcoin collateral held in Lombard’s protocol, and (2) the <a href="https://www.coindesk.com/tech/2024/10/16/protocol-village" target="_blank">Bascule drawbridge</a> which enforces secure minting of Lombard’s LBTC on Ethereum. In partnership with the Sui Foundation, Lombard, and Babylon, we are excited to extend all this functionality to Sui and bring LBTC's capabilities to the Sui ecosystem.<br> <br> ## Why we are excited about Sui<br> <br> The team building Sui, <a href="https://www.mystenlabs.com/" target="_blank">Mysten Labs</a>, has deep roots in academic research—like our team's work, their efforts span programming languages and security. Indeed, the Move language has many similarities to Rust—the language we use to implement CubeSigner—and uses many ideas from programming languages to eliminate whole classes of vulnerabilities by design. We are excited to bring systems like our Bascule drawbridge to Sui and support teams building secure applications and serious infrastructure in this ecosystem (with a serious key manager 😉).<br> <br> ## Step 0: Hardware-enshrined smart contracts protect Lombard deposits<br> <br> The CubeSigner key management platform has long supported Sui transaction signing, and given Lombard’s success on Ethereum, this is an obvious next step for us to work together to expand support for LBTC on Sui.<br> <br> Lombard users wishing to mint LBTC on Sui will have the same security guarantees as those using Ethereum today. All BTC deposits to the Lombard protocol are protected by <a href="/blog/a-step-towards-smart-contracts-on-bitcoin" target="_blank">hardware-enshrined smart contracts</a>, which we developed to address Bitcoin’s programmability limitations and bring decentralized security to Bitcoin-based protocol operations. Hardware-enshrined smart contracts are used by decentralized protocols like Lombard to provide the same robust security guarantees as familiar protocols like Ethereum and Sui offer their users, but use secure hardware in addition to consensus for security.<br> <br> <a href="https://www.lombard.finance/blog/lombard-collaboration-cubist-hardware-enshrined-governance-for-bitcoin-liquid-staking/" target="_blank">In Lombard’s case</a>, hardware-enshrined smart contracts enforce that deposited funds can only be used for Babylon staking (and not be sent to an arbitrary wallet address), and that sensitive governance changes—like updating the contract to change how funds can be used—must be approved by many different parties and are subject to a waiting period. Like "normal" smart contracts, this ensures the protocol controls are decentralized and never in the control of any single person.<br> <br> ## Step 1: Bascule will ensure LBTC minted on Sui is backed by real BTC<br> <br> We built the <a href="/blog/introducing-the-bascule-drawbridge-for-bitcoin-bridge-security" target="_blank">Bascule Drawbridge</a> to ensure that every LBTC minted on Ethereum is backed by a corresponding BTC deposit on Bitcoin—and prevent losing funds to <a href="https://arxiv.org/abs/2410.01107" target="_blank">the most common types of bridge hacks</a>. Today, Bascule monitors the Bitcoin chain for BTC deposits to Lombard and reports these deposits to a contract on-chain: the Lombard LBTC contract only mints LBTC if both the Lombard Consortium signed the deposit receipt and Bascule approves the deposit. This ensures there are multiple, independent layers of defense—and each layer takes advantage of both secure hardware and decentralization to provide strong security guarantees.<br> <br> We are excited to extend Bascule to Move—and bring unparalleled bridging security from Bitcoin to the Sui ecosystem! After all, enforcing that each LBTC mint is backed by a BTC deposit is just enforcing <a href="https://docs.sui.io/concepts/object-ownership#shared" target="_blank">ownership</a> across chains.<br> <br> ## Get ready for Babylon Cap-3<br> <br> Lombard was the largest contributor to Babylon’s Cap-2 in October, taking 30% of the cap with 7,166 BTC staked, and we are proud to have powered the underlying infrastructure that made this possible. We look forward to Cap-3 in December, when BTC holders will be able to deposit their BTC to Lombard for staking on Babylon and receive LBTC natively minted on Sui that they can use for lending, borrowing, and trading across Sui’s DeFi ecosystem.<br> <br> <br>