Hemi (Hemi Network)

Hemi is a modular Layer-2 protocol that unifies Bitcoin security with Ethereum-grade programmability via a Hemi Virtual Machine (hVM) — an EVM wrapped around a full-indexed Bitcoin node. It enables institutions and developers to deploy native BTC into compliant yield strategies and DeFi applications while BTC remains in qualified custody, without synthetic or wrapped assets.

Hemi generates yield through several built-in mechanisms. Here is how each one works.

1. Bitcoin Tunnel & Programmable Yield

Your Bitcoin stays in qualified custody — held by trusted custodians like BitGo, Coinbase Custody, Fireblocks, or Anchorage. A "tunnel" connects that Bitcoin to Hemi's smart-contract layer. For smaller amounts, the tunnel uses over-collateralized multisig vaults (multiple signatures required to move funds). For larger amounts, it uses a BitVM-based system. Once connected, smart contracts on the Hemi Virtual Machine (hVM) can put that Bitcoin to work — through lending, providing liquidity, or interest-bearing strategies — without wrapping it or creating a synthetic version. The Bitcoin itself never leaves custody.

2. Proof-of-Proof (PoP) Mining

"PoP Miners" publish segments of Hemi's chain onto the Bitcoin blockchain. By doing this, they help secure Hemi with Bitcoin's full proof-of-work security. In return, they earn rewards in Hemi's native token (protocol emissions plus transaction fees).

3. Decentralized Publishers & Challengers

Publishers stake native tokens and submit batches of Hemi's rollup data (state roots and blocks) to the Ethereum network. They earn protocol emissions, transaction fees, and data-availability fees. Challengers watch the Publishers for mistakes. If a Publisher misbehaves, a Challenger can submit a fault proof (evidence of the error) and earn a portion of that Publisher's staked tokens that get slashed (taken away as penalty).

4. Token-Based Incentives

• Staking $HEMI: Holders can stake the native token to help secure the network and earn validator or delegation rewards.
• Dual-staking: Staking both HEMI and stBTC together creates a combined yield loop.
• Fee distribution (HIPPO-002): Network fees are split among validators, liquidity pools, and the treasury. A portion is burned (removed from circulation), which can create deflationary pressure.
• veHEMI governance: Token holders can lock their HEMI to get voting power over emissions and protocol settings.

5. Ecosystem Incentives

The protocol rewards developers, institutions, and liquidity providers with native tokens to help launch and grow apps (dApps). Curated, risk-managed strategies are available for institutional portfolios. A dual-asset gas model lets users pay transaction fees in either ETH or native tokens (with an automated conversion), keeping the system accessible.

Hemi Labs has raised a total of $30 million across two funding rounds.

First round (September 2024): $15 million raised to develop and launch the Hemi Network. The round was led by Binance Labs, Breyer Capital, and Big Brain Holdings. Additional participants included Crypto.com, Web3 Ventures, HyperChain Capital, Alchemy, SALT Fund, Kelly Investments, Sunflower Capital, DNA Fund, Gate Ventures, Quantstamp, TRGC, BTC INC, Artichoke Capital, Cypher Capital, SNZ Holding, C6E, IBG Capital, Protein Capital, MON Ventures, S5V, Impossible Finance, Jihan Wu, George Burke, and Sonny Singh.

Second round (August 2025): $15 million raised to expand Bitcoin programmability and accelerate ecosystem development. The round included YZi Labs (formerly Binance Labs), Republic Digital, HyperChain Capital, Breyer Capital, Big Brain Holdings, Crypto.com, and others. Hemi disclosed that this funding would support borrowing, lending, and trading applications on Bitcoin as well as further development of the Hemi Virtual Machine (hVM).