The Hermetica stablecoin platform is introducing its synthetic dollar, USDh, to the Stacks Bitcoin Layer 2 network. This move makes USDh the first Bitcoin-backed stablecoin to become part of the expanding Stacks ecosystem. CEO Dylan Floyd from Bitflow expressed enthusiasm about the launch, highlighting USDh’s qualities as a stablecoin fully backed by Bitcoin, efficient in terms of capital, and offering sustainable crypto-native yield.
USDh plays a significant role in Bitcoin DeFi by providing a stable, dollar-pegged coin backed entirely by Bitcoin, enabling users to earn up to a 25% yield while remaining in the Bitcoin ecosystem. Unlike traditional fiat-backed stablecoins that involve financial institutions, USDh gives users complete control over their assets.
Hermetica’s integration of USDh into Stacks is crucial for scaling Bitcoin, as emphasized by CEO Jakob Schillinger. The launch of USDh on Stacks offers Bitcoin-backed yield and a liquid dollar asset, essential for expanding Bitcoin DeFi on Stacks.
Despite the global stablecoin market reaching $160 billion in the past five years, the vast potential of Bitcoin’s $1.3 trillion market cap remains largely untapped. Hermetica aims to tap into this opportunity by offering a stablecoin backed by Bitcoin that seamlessly transacts on Bitcoin’s L1 and L2 networks. The peg of USDh to Bitcoin provides users with a stable, dollar-linked asset without the need to exit the Bitcoin ecosystem.
Various industry figures, including Tycho Onnasch of Zest and Peter Watson of Velar, recognize the importance of stablecoin liquidity and the potential of USDh to become a central piece of the Stacks ecosystem. The success of USDh is evident, with its integration into platforms like Liquidium and MagicEden, accumulating $2 million in Total Value Locked during a private whitelist phase on the Bitcoin Layer-1 Runes protocol.
With Stacks preparing for a major upgrade in September 2024, the inclusion of USDh marks a significant milestone for the platform and Bitcoin-backed financial tools in the DeFi space. The collaboration between Hermetica and Stacks holds promise for the future of stablecoin innovation and adoption within the Bitcoin ecosystem.