The Sui Foundation Enters Into a Strategic Partnership with Franklin Templeton Digital Assets and Joins Forces with Babylon Labs, Lombard, and Cubist to Integrate Bitcoin Liquidity into Its Ecosystem

The Sui Foundation, which is focused on the advancement and adoption of the Sui network, has entered into a strategic partnership with Franklin Templeton Digital Assets

Asset manager Franklin Templeton Digital Assets (FTDA) has partnered with Sui to grow the Layer 1 blockchain’s ecosystem and explore new use cases.

Announced on Tuesday, the collaboration builds on FTDA’s existing investments in the Sui ecosystem, with the partnership set to bolster the development of blockchain-based solutions.

“Sui was originally inspired by some of the challenges FTDA is helping to solve, particularly those that exist within decentralized finance today,” said Jameel Khalfan, Sui head of ecosystem development.

Franklin Templeton began exploring blockchain several years ago with node validation and blockchain research. The firm has since launched tokenized money market funds on Base, Stellar, Aptos, Avalanche, Arbitrum and Polygon.

“At times, we partner with visionary teams creating new paradigms. Other times, we partner with transformative paradigms brought to life by exceptional teams. With Sui, we’ve found both — remarkable people and cutting-edge technology,” said Kevin Farrelly, vice president and director of digital asset management at Franklin Templeton, speaking about the investment on X.

Bitcoin liquidity comes to Sui

Separately, Sui has partnered with Babylon Labs, Lombard and Cubist to integrate Bitcoin staking into the Sui blockchain, enabling BTC holders to stake their assets via Babylon’s protocol and in turn receive LBTC — Sui-native liquid Bitcoin tokens.

The initiative aims to unlock Bitcoin’s $1.8 trillion liquidity for DeFi applications, offering lending, borrowing and trading opportunities without sacrificing security or liquidity, according to an announcement on Tuesday.

“Bitcoin's $1.8 trillion market capitalization represents immense untapped potential. Together, we are building a future where Bitcoin holders can fully participate in the next generation on on-chain finance without compromising security or liquidity,” said Jacob Phillips, co-founder of Lombard.

Babylon Labs, known for pioneering Bitcoin security and liquidity solutions, is central to the initiative, with Cubist providing critical infrastructure for secure deposits, minting and staking. Lombard’s LBTC, which has already passed $1 billion in assets on Ethereum, will be a linchpin in Sui’s burgeoning DeFi landscape.

NAVI, a leading borrow-lend protocol in the Sui ecosystem, has already shown interest in supporting LBTC pools, marking an early sign of broader ecosystem enthusiasm for Bitcoin’s integration into Sui’s programmable framework.

Growing momentum

Describing itself as “a first-of-its-kind Layer 1 blockchain and smart contract platform designed to make digital asset ownership fast, private, secure, and accessible,” Sui has become a secure and scalable platform for applications ranging from gaming and tokenized securities to DeFi tools like DeepBook, a decentralized limit order book, and Karrier One, a decentralized mobile carrier network. Recent developments also include the integration of the native USDC stablecoin, eliminating risks associated with bridged assets.

Sui has rode on Bitcoin's bullish momentum, with its token price growing by almost 80% in the past month as investor confidence in the Sui ecosystem grows. The network, however, suffered its first significant network outage on November 21, halting block production for over two hours as a result of a bug in the network's congestion control system.