Hermetica Raises $1.7M to Bring Bitcoin-Backed Stablecoin USDh to DeFi

Hermetica, the company behind the Bitcoin-backed stablecoin USDh, has raised $1.7 million in seed funding.

Hermetica, the company behind the Bitcoin-backed stablecoin USDh, has announced a $1.7 million seed funding round.

The funding will go towards supporting the growth of USDh, a stablecoin that is designed to be backed by Bitcoin (BTC). A stablecoin is a type of cryptocurrency that aims to keep its value tied to a stable asset, such as the U.S. dollar, rather than fluctuating like Bitcoin.

USDh enables Bitcoin holders to transact with a digital asset that is pegged to the value of the U.S. dollar without leaving the Bitcoin ecosystem. For instance, 1 USDh is equal to 1 USD worth of Bitcoin.

According to a press release from the company, UTXO Management led the funding round, which included several major investors. Among them were CMS Holdings, Ethos Fund, and Trust Machines SPV. Strategic backers also participated, including Tycho Onnasch of Zest Protocol and Robin Obermaier of Liquidium.

What Is USDh?

USDh is issued on Bitcoin’s main blockchain (Layer 1) and on Layer 2 networks, which allow for faster and cheaper transactions. The stablecoin can be purchased on decentralized exchanges.

Last month, Hermetica made USDh available on the Stacks Layer 2 network, a move that offered users the potential to earn yields of up to 25%.

As the stablecoin market continues to expand, USDh aims to capture a portion of the estimated $1 trillion in untapped Bitcoin value that could be realized in decentralized finance (DeFi). Its objective is to allow Bitcoin market participants to hold dollars securely without leaving the Bitcoin ecosystem or converting to fiat.