Bringing its synthetic dollar, USDh, onto the Stacks Bitcoin Layer 2 network, Hermetica, a platform backed by Bitcoin, disclosed its expansion to Finbold on Wednesday, September 25.
With this move, USDh becomes the first Bitcoin-backed stablecoin to join the rapidly expanding Stacks ecosystem.
Expressing his enthusiasm for the launch, Bitflow CEO Dylan Floyd stated:
“We’re thrilled to introduce USDh, a stablecoin that is fully bitcoin-backed, capital efficient, and offers sustainable crypto-native yield. Our upcoming pools for USDh on the AMM DEX will provide deep stablecoin liquidity for our users. Thanks to our aggregator, USDh will be immediately swappable with every other SIP10 token.”
The significance of USDh in Bitcoin DeFi
By offering a stable, dollar-pegged coin entirely supported by Bitcoin (BTC), USDh enables users to earn up to a 25% yield while staying within the Bitcoin ecosystem.
In contrast to traditional fiat currency-backed stablecoins, USDh grants users full asset control without the involvement of third-party financial institutions.
Highlighting the importance of this alliance, Hermetica CEO Jakob Schillinger emphasized:
“To scale Bitcoin effectively, a vibrant ecosystem of Bitcoin L2s is imperative. By introducing USDh on Stacks, we are providing a crucial piece of infrastructure to one of the prominent Bitcoin ecosystems. We’re excited to offer Bitcoin-backed yield and a liquid dollar asset to facilitate the growth of Bitcoin DeFi on Stacks.”
Exploring the potential of the stablecoin market
With the global stablecoin market hitting $160 billion over the last five years, Bitcoin’s substantial $1.3 trillion market cap remains largely unexplored.
Currently, decentralized finance protocols utilize just 1% of Bitcoin’s value, presenting a significant $360 billion opportunity.
Hermetica aims to seize this opportunity by offering a stablecoin backed by Bitcoin that seamlessly transacts on Bitcoin’s L1 and L2 networks.
With USDh pegged to Bitcoin (1 USDh = 1 USD in satoshis), users can access a stable, dollar-linked asset without exiting the Bitcoin ecosystem.
Zest CEO Tycho Onnasch stressed the importance of stablecoin liquidity, stating:
“Stablecoin liquidity is vital for a robust DeFi ecosystem. With its efficient design and full Bitcoin backing, USDh has the potential to become a central component of the Stacks ecosystem. We’re excited to introduce USDh to our Zest Protocol users, the leading lending platform on Stacks.”
Velar CMO Peter Watson added:
“The launch of Hermetica (USDh) on the Stacks network provides a much-needed stablecoin secured by Bitcoin. USDh, supported by a committed team believing in Bitcoin’s decentralized principles, offers a robust asset for the ecosystem. Velar will initially list USDh on our DEX, providing users with a yield-bearing stablecoin for enhanced accessibility.”
The impact of USDh’s success
Originally launched on the Bitcoin Layer-1 Runes protocol, USDh generated $2 million in Total Value Locked (TVL) during a private whitelist phase.
The demand for Bitcoin-backed stablecoins in DeFi is evident, with USDh already integrated into platforms like Liquidium and MagicEden.
Stacks is preparing for a significant upgrade in September 2024, featuring 5-second block times and full Bitcoin finality, expected to foster DeFi growth.
The integration of USDh marks a crucial milestone for the platform and Bitcoin-backed financial solutions in general.
The original article, “Hermetica brings its synthetic dollar USDh to Stacks ,” was published on Finbold.