Bitcoin-backed Synthetic Dollar Launches with 25% Yield
Hermetica Labs has made an exciting announcement in the world of decentralized finance (DeFi). They are launching the first-ever Bitcoin-backed synthetic United States dollar with yield-generating capabilities. This new synthetic dollar, known as USDh, will provide users with yields of up to 25%. The goal is to allow Bitcoin holders to earn yield on their U.S. dollars without having to rely on the traditional banking system or invest in non-Bitcoin-related products.
According to Jakob Schillinger, founder and CEO of Hermetica Labs, USDh will bring increased liquidity and new use-cases to Bitcoin DeFi. It will enable Bitcoiners to trade, lend, and transact in a dollar asset that is fully backed by Bitcoin. This development is part of the Bitcoin DeFi (BTCFi) movement, which aims to bring DeFi capabilities to the Bitcoin blockchain network.
There are concerns about the sustainability of a 25% yield in the long term. These concerns arose when Ethena’s USDe launched with a 27.6% yield for holders. Similar worries could arise for Hermetica’s USDh, as the 25% annual percentage yield (APY) is higher than what Anchor Protocol offered before the collapse of Terra in May 2022.
Schillinger reassures that the yield is sustainable and derived from futures funding rates. He explains that the Bitcoin-native yield fluctuates with the market’s demand for long leverage. Backtest data from January 2021 to March 2024 shows an average APY of 11.71%, with the annual return reaching 26.11% during the 2022 bull market. According to Schillinger, the demand for Bitcoin futures will ensure that the USDh yield remains sustainable.
The introduction of Ordinals has played a crucial role in the growth of BTCFi. As more protocols focus on building utility and DeFi capabilities around Bitcoin, it is predicted that Bitcoin DeFi will surpass Ethereum DeFi in size within the next five years. Ordinals trading volumes have already exceeded the volumes of Ethereum and Solana NFTs combined in some months. With over $1T in latent BTC capital, Bitcoin DeFi has great potential for explosive growth.
25 thoughts on “Bitcoin-backed Synthetic Dollar Launches with 25% Yield”
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I’ve seen this story before. Promising yields that eventually disappear overnight. I won’t be fooled again.
Another DeFi project with sky-high yields. When will people realize that this is too good to be true?
Congratulations to Hermetica Labs for making such a groundbreaking announcement. You’ve definitely caught my attention and got me excited about the future of Bitcoin DeFi!
It’s amazing to see how the Bitcoin DeFi movement is expanding with products like USDh. This will definitely bring liquidity and new use-cases to the ecosystem.
When will people realize that these projects are just playing with our money?
The sustainability of the 25% yield is a valid concern, but I trust that Hermetica Labs has done their due diligence. Looking forward to seeing how this plays out in the long run.
I’m not falling for this trap again. Fool me once, shame on you. Fool me twice, shame on me.
Here we go again with another hyped-up DeFi project. I’ll believe it when I see it.
I’m glad Schillinger addressed the concerns about the yield. Their reliance on futures funding rates seems like a solid strategy.
The latent BTC capital of over $1T is mind-blowing. The explosive growth potential of Bitcoin DeFi is undeniable. Buckle up for an incredible ride!
Wow, another DeFi project claiming to offer unrealistic yields. Will this one collapse too?
I’m tired of these projects playing with people’s money. When will we learn?
These high yields are just bait to attract unsuspecting investors. Don’t fall for it!
Backtest data showing an average APY of 11.71% is impressive. The potential for a 26.11% annual return during the bull market is even more exciting!
Wow, this is such an exciting announcement! I can’t wait to see how this Bitcoin-backed synthetic USDh will revolutionize decentralized finance.
It’s all fun and games until the bubble bursts. Don’t be fooled by these unsustainable yields!
With the introduction of Ordinals, the growth of BTCFi is unstoppable. It’s only a matter of time before Bitcoin DeFi surpasses Ethereum DeFi.
I find it hard to believe that they can sustain a 25% yield in the long term. Sounds like a red flag to me.
I’ll believe it when I see it. These claims of sustainable yields are just empty promises.
I’ve lost count of how many DeFi projects have promised high yields and then disappeared. This one won’t be any different.
The trading volumes of Ordinals already exceeding Ethereum and Solana NFTs combined speaks volumes about the potential of Bitcoin DeFi. Let’s keep pushing the boundaries!
It’s always the same with these DeFi projects. They lure you in with high yields, and then everything comes crashing down.
These projects are just creating more instability in the market. We need regulation, not more empty promises.
How can they guarantee such high yields? Something doesn’t add up here.
Finally, a way for Bitcoin holders to earn yield on their U.S. dollars without relying on traditional banking systems! Kudos to Hermetica Labs for bringing this innovation to the market.