Bitcoin Developers Introduce Stablecoin Backed by BTC Alongside Rune Token
A new dollar-pegged stablecoin native to the Bitcoin blockchain has been launched by crypto developers leveraging the Runes token standard. The token, called USDh, is unique in that it is backed by and redeemable for BTC rather than traditional cash. USDh offers a yield of up to 25% per year to its holders.
According to Jakob Schillinger, the founder & CEO of Hermetica, the stablecoin protocol behind USDh, “USDh is Bitcoin all the way down, which means the protocol doesn’t rely on fiat rails and can operate completely outside the traditional banking system.”
The Runes token standard, introduced by Casey Rordamor in April, has gained popularity for its data efficiency and potential to unlock practical Bitcoin-based assets beyond meme coins. Runes is considered a significant advancement over previous standards like Ordinals and BRC-20.
Hermetica’s model differs from widely used stablecoins like Tether (USDT) and Circle USD (USDC) as it pays out the yield generated by the protocol to its token holders. This decentralized approach ensures that token holders are not exposed to risks associated with centralized stablecoins, such as freezing of assets or de-pegging.
Hermetica aims to tap into the estimated $360 billion of idle capital in the Bitcoin DeFi ecosystem by offering a reliable native stablecoin. The protocol plans to scale its Bitcoin-native DeFi using Stacks, a Bitcoin layer-2 blockchain compatible with smart contracts. Stacks has recently been cleared of potential securities fraud after a three-year investigation.
Liquidium, a layer-1-based peer-to-peer protocol for borrowing and lending Bitcoin-based assets, has integrated with Stacks. Liquidium CEO Robin Obermaier believes that enabling users to utilize stablecoins in Bitcoin DeFi applications is a significant milestone for the Bitcoin ecosystem.
In conclusion, Hermetica’s innovative approach to stablecoins, backed by BTC and offering attractive yields, showcases the evolving landscape of decentralized finance on the Bitcoin blockchain.
