@Lorenzo Protocol The actions on the Sui chain are actually quite aggressive. It is the first project to launch BTC LST in the MoveVM ecosystem. This first mover position has given Lorenzo many strategic advantages, but it has also made it a test case for the entire Move ecosystem's BTC narrative.
First, let's talk about why Sui was chosen. On the surface, it seems to be because of the security of the Move language and the high performance of Sui. However, the deeper reason might be that the Sui ecosystem is still in its early stages, with not many DeFi protocols and less intense competition. Lorenzo can quickly occupy an important position. If he were to go to a mature market like Ethereum or BSC, Lorenzo would just be one of many BTC packaged assets, making it hard to stand out.
The technical characteristics of the Sui chain are indeed suitable for Lorenzo's products. The resource model of the Move language can prevent many smart contract vulnerabilities from the compiler level, such as reentrancy attacks and integer overflow, which are common issues in Solidity. Such security guarantees are important for protocols dealing with large amounts of BTC assets.
However, the problem is that the overall TVL and user base of Sui are not large enough. The entire Sui ecosystem's DeFi TVL may be less than 1 billion USD. Lorenzo putting over a million USD of stBTC into such a small pool would result in a very high percentage. This is both an advantage and a risk. The advantage is significant influence, while the risk is that if the Sui ecosystem does not thrive, the returns on this investment by Lorenzo will be very limited.
Integration with NAVI Protocol is the core layout of Lorenzo on Sui. NAVI is the largest lending protocol on Sui, similar to Aave on Ethereum. stBTC can be used as collateral to borrow other assets on NAVI. This function itself is nothing special, but in the new Sui ecosystem, the only BTC asset that can provide this function is Lorenzo.
NAVI has specifically set up a lending pool for stBTC and has allocated 10,000 USD as activity rewards. The depth of this cooperation indicates that NAVI values the liquidity brought by stBTC. For an emerging lending protocol, attracting high-quality collateral is crucial. Lorenzo's entry provides NAVI with an important growth point.
During the activity, the deposits of stBTC on NAVI indeed exceeded 1 million USD, but if you look closely, you'll find that most of these deposits come from a few large holders, and retail participation is not high. The reason is simple: to participate in this activity, you first need to have BTC, then cross-chain to Sui, mint it into stBTC, and finally deposit it into NAVI. This process has too high a barrier for ordinary users.
The liquidity pool for stBTC on Cetus DEX is similar. Although both Lorenzo and Cetus are promoting it, the actual trading volume and TVL are not ideal. The stBTC/wBTC trading pair should theoretically have many arbitrage opportunities because both are BTC derivatives, and there could be price discrepancies. However, arbitrageurs are not active, indicating that the market's attention to this pool is still insufficient.
The biggest challenge Lorenzo faces on Sui is actually user education. The Move ecosystem is still unfamiliar to most crypto users. They are used to operating on EVM chains, and suddenly having to learn a completely new wallet, a new DEX interface, and a new trading process can be daunting for many. Even if Lorenzo's product design is excellent, it won't matter if users don't know how to use it.
However, Lorenzo's layout on Sui does have long-term value. If the Move ecosystem really takes off and Sui becomes the next mainstream public chain, Lorenzo, as the first BTC liquidity provider to enter, will enjoy a huge first-mover advantage. All subsequent BTC projects will have to compete with Lorenzo, who has already established deep integration with core protocols like NAVI and Cetus.
From a technical implementation perspective, Lorenzo deployed stBTC on Sui using many innovative solutions, such as synchronizing Bitcoin block headers through Bitcoin Relayer and using Merkle proofs to verify deposit transactions. These technologies are relatively mature on Ethereum, but porting them to MoveVM requires re-implementation. The fact that the Lorenzo team can complete this migration indicates that their technical capabilities are sound.
The implementation of multi-party custody on Sui is also quite sophisticated. Lorenzo uses MPC multi-party computation technology, with private key shards stored in COBO, CEFFU, and ChainUp. Any movement of funds requires signatures from at least two of these institutions. This security architecture performs better under Move's resource model because the transfer of resource ownership must be explicitly declared, avoiding implicit authorization vulnerabilities.
However, the Sui chain itself has some limitations, such as the choice of cross-chain bridges not being as rich as Ethereum. Lorenzo mainly relies on Wormhole to transfer BTC between Sui and other chains. This single dependency is a risk point. If Wormhole encounters issues, the liquidity of stBTC on Sui may be cut off.
Another issue is that the validator set on Sui is relatively centralized. Although a DPoS mechanism is adopted, the actual stake distribution is not sufficiently decentralized. This poses a potential risk for protocols like Lorenzo that need to handle large amounts of BTC assets on Sui. If the Sui chain itself encounters security issues or downtime, Lorenzo's assets could be trapped.
From the perspective of ecological synergy, Lorenzo's success on Sui largely depends on the overall development of the Sui ecosystem. If Sui can attract more DeFi protocols, more users, and more funds, then Lorenzo's stBTC will have more use cases. However, if Sui's development does not meet expectations, Lorenzo may need to reassess its investment in this chain.
The developer activity in the Sui ecosystem is a metric worth paying attention to. Currently, the developer community on Sui is still small, and the number of new projects and protocols added each month is limited. Lorenzo may need more time and resources to find enough partners to expand the application scenarios of stBTC in this ecosystem.
The governance mechanism on Sui is also worth discussing. Lorenzo's Cosmos main chain and Sui are two completely independent ecosystems. How to implement governance logic consistent with the main chain on Sui and how to allow stBTC holders on Sui to participate in Lorenzo's global decision-making are cross-chain governance issues that currently do not have perfect solutions.
From a more macro perspective, the experiment on Sui is actually betting on the future of the Move ecosystem. If Move truly becomes the mainstream paradigm for the next generation of smart contracts, Lorenzo's early layout will yield huge returns. However, if the Move ecosystem cannot break through, the resources Lorenzo invested in Sui may become sunk costs. The outcome of this bet may not be seen for years.