Hermetica Labs is a decentralized finance protocol built on Bitcoin, which has launched USDh – the first synthetic US dollar native to the network. The new product allows users to achieve yields of up to 25% without exposure to traditional finance.
The new synthetic dollar is designed to increase liquidation and utility to the decentralized finance ecosystem forming around Bitcoin through the L1 and L2 protocols. According to Hermetica CEO Jakob Schillinger, USDh will allow Bitcoiner to hold and profit on the value of their dollar while remaining fully backed by Bitcoin.
“USDh is a groundbreaking synthetic dollar backed entirely by Bitcoin and outside the fiat system. No banks, no fiat, just Bitcoin,” Hermetica Labs said on X.
Prior to the USDh launch, Ethena's USDe also went live in March, yielding 27.6% and raising concerns about the protocol's long-term sustainability. Similar questions can be asked regarding Hermetica's 25% annual percentage yield (APY), which significantly exceeds the ill-fated Anchor Protocol's 20% yield for TerraUSD (UST) before its collapse in May 2022.
Notably, Fantom founder Andre Cronje has spoken out about this trend, criticizing negative funding rates and uncollateralized stablecoins.
In response, Schillinger asserted that USDh's yield, derived from the Bitcoin Futures Contract funding rate, is sustainable due to the need for Longing leverage in the Bitcoin Futures Contract market. Backtest data (collected by Hermetica Labs) from January 2021 to March 2024 shows an Medium APY (annual percentage yield) of 11.71% and annualized return of 26.11% in the market. bull market 2022.
Schillinger claims the birth of Ordinals as an important catalyst for the development of Bitcoin DeFi (BTCFi). He believes BTCFi will rival and eclipse the scale of Ethereum DeFi within the next five years, citing instances where Ordinal's volume has surpassed the volume of Ethereum and Solana Non-Fungible Token combined.
Join Bitcoin Magazine's Telegram: https://t.me/tapchibitcoinvn
Follow Twitter (X): https://twitter.com/tapchibtc_io
Follow Tiktok: https://www.tiktok.com/@tapchibitcoin
Minh Anh
According to Crypto Briefing
