In a recent disclosure to Finbold on Wednesday, September 25th, Hermetica, a platform that offers a Bitcoin-backed stablecoin, is introducing its synthetic dollar, USDh, onto the Stacks (STX) Bitcoin Layer 2 (L2) network. This move makes USDh the first-ever Bitcoin-backed stablecoin to become part of the rapidly expanding Stacks ecosystem. Dylan Floyd, the CEO of Bitflow, expressed his enthusiasm for the launch, stating that USDh possesses all the desired characteristics of a stablecoin, such as being fully backed by Bitcoin, efficient in capital usage, and providing sustainable crypto-native yield. Bitflow is eager to introduce new pools for USDh in their AMM DEX, offering deep stablecoin liquidity to users.
The integration of USDh into the Stacks ecosystem is significant as it allows users to generate a substantial yield while remaining within the Bitcoin ecosystem, as USDh is a stable, dollar-pegged coin wholly supported by Bitcoin (BTC). Unlike conventional stablecoins linked to fiat currencies, USDh provides users with complete asset control without the involvement of third-party financial institutions. Jakob Schillinger, the CEO of Hermetica, stressed the importance of this integration in scaling Bitcoin and expanding the Bitcoin DeFi space by providing Bitcoin-backed yield and a liquid dollar asset essential for growth.
The global stablecoin market has reached a value of $160 billion in the last five years, yet Bitcoin’s vast market cap of $1.3 trillion remains largely untapped. Current decentralized finance (DeFi) protocols utilize only 1% of Bitcoin’s value, presenting a significant $360 billion opportunity. Hermetica aims to capitalize on this potential by offering a stablecoin backed by Bitcoin that operates seamlessly on both Bitcoin’s L1 and L2 networks. The peg of USDh to Bitcoin (1 USDh = 1 USD worth of satoshis) gives users a stable, dollar-linked asset while within the Bitcoin ecosystem. Stablecoin liquidity is crucial for a robust DeFi ecosystem, and USDh, with its efficient design and full Bitcoin backing, stands as a vital component of the Stacks ecosystem.
Initially launched on the Bitcoin Layer-1 Runes protocol, USDh achieved $2 million in Total Value Locked (TVL) during a private whitelist phase, indicating the demand for Bitcoin-backed stablecoins within DeFi. The inclusion of USDh in platforms like Liquidium and MagicEden showcases its growing relevance. Stacks’ upcoming major upgrade in September 2024, featuring 5-second block times and full Bitcoin finality, is expected to drive DeFi growth further. The incorporation of USDh marks a significant milestone for the platform and Bitcoin-backed financial tools in general. [Read More](https://finbold.com/hermetica-brings-its-synthetic-dollar-usdh-to-stacks/).