How Hemi tunnels connect to Bitcoin

Hemi’s tunnels take a trust-minimized approach to connecting Bitcoin, enabling holders to participate in a wide range of once-inaccessible DeFi activities with our numerous partners and other projects deployed on the network. The Hemi Bitcoin Tunnel is designed to support BTC and Bitcoin-native asset movement between Bitcoin and Hemi without centralized custodianship, eliminating the risks associated with asset tunnels.

Inside the Hemi Bitcoin Tunnel

Accessible via the Hemi Portal, Hemi’s Tunnel features a straightforward interface. Simply select an origin and destination network, the actual asset, the amount of assets to transfer, and sign the transaction. 

Depositing Bitcoin Assets With The Hemi Tunnel

When you use the Hemi Tunnel to transfer bitcoin, it initiates the vaulting process. The assets are sent to and locked in a multi-signature vault, controlled by no single entity.

The Hemi Tunnel uses the capacity of the Hemi Virtual Machine™ (hVM) to keep track of the Bitcoin network. It monitors the UTXO table for transactions corresponding to the deposit for verification.

After verification, Hemi automatically mints the representative tokens corresponding to the deposited Bitcoin assets.

Withdrawing Bitcoin Assets With The Hemi Tunnel

If you opt to withdraw your Bitcoin assets from Hemi, the Hemi Portal supports the same easy process to swap out that it does in, just choose an EVM-based chain to tunnel from Hemi, an amount, and sign the transaction.

Once a Bitcoin withdrawal is initiated, in the background, the representative tokens are burned on Hemi, which signals the vault withdrawal process. 

Updates on the withdrawal transaction sent to the EVM-based network from Hemi’s Bitcoin Tunnel are then published to Bitcoin for accuracy and recording purposes. The Hemi Bitcoin Tunnel also verifies the corresponding token burn associated with the withdrawal as it readies the system.

Once ready, the system sends a withdrawal request to the multisig vault, and sufficient signatures are collected for authorization, after which the vault releases the corresponding Bitcoin-native assets to your Bitcoin address.

Hemi Bitcoin Tunnel deposits can take up to one hour to confirm, while withdrawals may take up to 12 hours. To preserve a smooth user experience, Hemi relies on market makers who assume risk to fulfill tunnel activity ahead of settlement finality.

Failsafe Mechanisms

Hemi’s hVM system is constantly monitoring the network for unauthorized withdrawals, with an optimistic model at its current phase of development. This allows any externally owned account to flag malicious activity on the network, wherein slashing conditions are imposed on parties deemed responsible. 

Future phases of development will see unauthorized use flagged through automated processes enabled via event notifications.

A Phased Development Approach

Hemi is rolling out the tunneling ecosystem in stages to balance usability, performance, and decentralization.

Phase 0 (Current)

The Hemi Bitcoin Tunnel uses an overcollateralized multisig model to manage vaults, with full support for bitcoin, and withdrawals via an optimistic dispute resolution system.

Phase 1

Hemi’s hVM will be upgraded with BitVM2 integration, allowing for a decentralized 1+N enhanced security, where a single honest participant is enough to prevent fraud. Wider support will be introduced for Bitcoin-based assets such as Runes and BRC-20s.

Phase 2

A mature BitVM2 and hVM integrated network model will emerge, enabling greater trust minimization. Bitcoin-based asset support will expand to encompass Ordinals.

Earn Points Tunneling To Hemi Now

During the Mainnet Season of the Hemi Points program, providing liquidity with hemiBTC remains one of the most effective point-earning strategies. Tunnel to Hemi and start earning immediately, with a 3x, 5x, or even 8x boost when you provide liquidity with hemiBTC in select pools with partners including Sushi, Oku, Izumi, and DODO.