
Hermetica, a decentralized finance (DeFi) protocol operating on Bitcoin Layer 2 Stacks, has announced a major liquidity initiative that is set to establish USDh as the largest stablecoin within the Stacks ecosystem.
USDh is Hermetica’s Bitcoin-backed yield-bearing stablecoin. The protocol has finalised a liquidity deal that will bring in approximately $3 million in USDh liquidity.
The move underscores Hermetica’s scalability and its efforts to offer compelling yield-generation opportunities.
Hermetica partners with Zest Protocol
As part of this initiative, Hermetica has partnered with Zest Protocol to launch an sBTC yield trade.
This product enables users to borrow USDh against sBTC and stake it for potentially high returns.
Hermetica said that a portion of the newly minted USDh will be supplied to Zest to kick-start borrowing, with up to $1 million USDh expected to be made available for loans.
“USDh’s latest liquidity boost marks a pivotal milestone for the Stacks DeFi ecosystem,” said Jakob Schillinger, Founder and CEO of Hermetica.
He added:
This initiative and the sBTC yield trade demonstrate not only the power of Bitcoin-backed assets on Stacks but also the potential for different DeFi protocols to collaborate, to deliver new, high-yield opportunities for users to borrow, stake, and earn.
The introduction of the sBTC yield trade comes at a time when the Stacks ecosystem is seeing growing interest in Bitcoin-backed assets.
According to Hermetica, the early stages of staking activity could result in annual percentage yields (APYs) of 40-50%, offering a window of high returns for participants. Currently, USDh has been generating significant returns, with an average APY of 18%.
Tycho Onnasch, Founder and CEO of Zest Protocol, emphasised the significance of the partnership:
sBTC represents the next evolution of programmable Bitcoin, enabling users to borrow against their holdings while accessing high-yield opportunities. This collaboration not only enhances liquidity but also demonstrates the innovation and potential of Bitcoin-backed assets in DeFi.
Hermetica’s broader vision is to position itself as a leader in Bitcoin-based decentralized finance.
The protocol’s focus on scalability and yield-bearing opportunities has attracted both users and investors.
Kevin, a partner at JPEG Trading, expressed confidence in USDh’s growth trajectory:
USDh is now poised to become the leading stablecoin on Stacks and, eventually, across all Bitcoin-based ecosystems. When we invested in Hermetica, it was with the belief that Bitcoin DeFi has a place in the new financial stack and USDh’s continued adoption is evidence we were right.
Further details on the liquidity initiative, yield opportunities, and sBTC yield trade will be shared in the coming weeks as Hermetica expands its ecosystem.
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