Hermetica, a decentralized finance (DeFi) platform, has made an exciting announcement regarding the launch of the first-ever synthetic United States dollar backed by Bitcoin. This innovative development in the world of Bitcoin-native DeFi is set to be released in June under the name USDh. According to Hermetica, users will have the opportunity to earn yields of up to 25% with this new synthetic dollar.
The introduction of USDh will allow Bitcoin holders to hold and earn yields on their U.S. dollars without relying on the traditional banking system or investing in non-Bitcoin-related products. Jakob Schillinger, the founder and CEO of Hermetica Labs, emphasized the significance of this advancement in the Bitcoin DeFi movement. He stated that Hermetica is a DeFi protocol on Bitcoin’s native blockchain called Stacks, and it aims to bring DeFi capabilities to the world’s first blockchain network.
However, there are concerns about the sustainability of a 25% yield in the long term. The launch of Ethena’s USDe, another Bitcoin-backed synthetic dollar with a 27.6% yield, raised similar concerns about the protocol’s viability. To address these concerns, Schillinger explained that the yield for USDh is sustainable and based on futures funding rates. He believes that the demand for Bitcoin futures will contribute to keeping the yield of USDh stable.
Schillinger also highlighted the growing trend of protocols integrating DeFi capabilities into Bitcoin. He mentioned that the introduction of Ordinals has been one of the most influential factors in the Bitcoin DeFi movement. As more protocols continue to enhance the utility and capabilities of Bitcoin, the world’s most secure blockchain network, the potential for Bitcoin DeFi to thrive is becoming increasingly promising.
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