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Cryptocurrency News Articles
Hermetica Expands Its Bitcoin-Backed Stablecoin USDh onto the Stacks (STX) Bitcoin Layer 2 (L2) Network
Sep 25, 2024 at 10:00 pm
By providing a stable, dollar-pegged coin backed entirely by Bitcoin (BTC), USDh allows users to generate up to a 25% yield while staying within the Bitcoin ecosystem.
Bitcoin-backed stablecoin platform Hermetica is bringing its synthetic dollar, USDh, to the Stacks (STX) Bitcoin Layer 2 (L2) network, Finbold learned on Wednesday, September 25.
With the expansion, USDh becomes the first Bitcoin-backed stablecoin to integrate into the rapidly growing Stacks ecosystem.
Announced earlier this year, USDh is a decentralized stablecoin that generates yield for holders and provides a fully bitcoin-backed, capital-efficient stablecoin to Web3 ecosystems. It is pegged to the dollar and backed 1:1 by Bitcoin, allowing users to seamlessly generate yield on their crypto assets.
According to the details shared with Finbold, USDh will be available on leading Stacks decentralized applications (dApps) like Bitflow, Velar, and Zest.
Moreover, the stablecoin will be listed on the StacksSwap DEX and integrated into the DeFi Llama Stacks dashboard.
Commenting on the launch, Dylan Floyd, CEO of Bitflow, said:
“USDh has all the attributes we’re looking for in a stablecoin: Fully bitcoin-backed, capital efficient, and a sustainable crypto-native yield. At Bitflow, we’re excited to launch new pools for USDh in our AMM DEX and bring deep stablecoin liquidity to our users. Thanks to our aggregator, USDh can be swapped with every other SIP10 token on Day 1.”
Highlighting the role of USDh in Bitcoin DeFi, Jakob Schillinger, CEO of Hermetica, said:
“In order for us to scale Bitcoin, we need a thriving ecosystem of Bitcoin L2s. With the launch of USDh on Stacks, we’re bringing a crucial piece of infrastructure to one of the leading Bitcoin ecosystems. We’re excited to now offer Bitcoin-backed yield and a liquid dollar asset that will be instrumental in scaling Bitcoin DeFi on Stacks.”
Tapping into the stablecoin market potential
The global stablecoin market has reached a value of $160 billion in the past five years, yet Bitcoin’s vast $1.3 trillion market cap remains largely untapped.
Currently, decentralized finance (DeFi) protocols utilize only 1% of Bitcoin’s value, presenting a substantial $360 billion opportunity.
Hermetica aims to capitalize on this opportunity by offering a stablecoin that is not only backed by Bitcoin but also transacts natively on Bitcoin’s L1 and L2 networks.
USDh’s peg to Bitcoin (1 USDh = 1 USD worth of satoshis) provides users with a stable, dollar-linked asset without requiring them to exit the Bitcoin ecosystem.
Commenting on the importance of stablecoin liquidity, Tycho Onnasch, CEO of Zest, said:
“Stablecoin liquidity is the crux of a robust DeFi ecosystem. With its capital-efficient design and full Bitcoin backing, USDh has the potential to become a central piece of the Stacks ecosystem. We’re thrilled to bring USDh to Zest Protocol users, the leading lending protocol on Stacks.”
Peter Watson, CMO of Velar, added:
“The launch of Hermetica (USDh) on the Stacks network brings a much-needed stablecoin secured by Bitcoin. Backed by a solid team that believes in Bitcoin’s decentralized ethos, USDh offers a resilient asset for the ecosystem. Velar will be initially listing USDh on our DEX, providing users with the option to hold a yield-bearing stablecoin, further enhancing its accessibility.”
The success of USDhis already evident, having amassed $2 million in Total Value Locked (TVL) during a private whitelist phase after launching on the Bitcoin Layer-1 Runes protocol.
The demand for Bitcoin-backed stablecoins within DeFi is strong, as USDh is already integrated into platforms like Liquidium and MagicEden.
Stacks is preparing for a major upgrade in September 2024, promising 5-second block times and full Bitcoin finality, which is expected to accelerate DeFi growth.
The inclusion of USDh is thus an important development for the platform and Bitcoin-backed financial instruments in general.
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