Hermetica has expanded its Bitcoin-backed stablecoin, USDh, to the Stacks Layer 2 network, marking a significant step for Bitcoin-based decentralized finance.
Launch of USDh on Stacks L2
This move allows users to hold USDh, a stablecoin pegged to the US dollar and fully backed by Bitcoin, while earning yields of up to 25%, according to a press release shared with crypto.news. Unlike typical stablecoins backed by fiat reserves in banks, USDh is fully tied to Bitcoin. This allows Bitcoin users to earn yield and transact in dollars without leaving the Bitcoin ecosystem.
Integration of USDh in DeFi ecosystem
USDh first gained traction four months ago on Bitcoin’s Layer 1 and quickly attracted $2 million in Total Value Locked, demonstrating strong demand for Bitcoin-backed stablecoins. By expanding to Stacks, a Bitcoin L2, Hermetica aims to tap into a larger DeFi user base while maintaining Bitcoin’s security features. Stacks, recently upgraded to offer faster block times, is an ideal platform for USDh’s growth. Major decentralized exchanges, such as Bitflow Finance, Velar, and Zest Protocol, are integrating USDh, enhancing its use in the ecosystem.
Potential of USDh and DeFi growth
This launch aims to unlock Bitcoin’s untapped potential, allowing holders to access stablecoin liquidity without exiting the Bitcoin environment. With only 1% of Bitcoin’s $1.3 trillion market cap involved in DeFi, USDh can bridge the gap between Bitcoin’s value and the expanding DeFi market.
Expanding USDh to Stacks L2 represents a significant step in the development of Bitcoin-based DeFi. With high yield potential and integration capabilities within existing DeFi ecosystems, USDh opens new horizons for Bitcoin users.
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