Bitcoin-backed stablecoins are here.
Meet @HermeticaFi, building USDh, a yield-bearing stablecoin backed 1:1 by BTC.
Learn how USDh uses a short perpetual futures position to create a price-stable dollar with no TradFi exposure or bank risk 🧵👇
In March 2023, USDC lost its peg and fell to $0.88 because Silvergate and Silicon Valley Bank collapsed. Both banks backed USDC.
The problem is clear. Using USDC or Tether on Bitcoin means relying on traditional banks.
USDh changes this entirely.
USDh is fully backed by Bitcoin and stays stable through a delta-neutral strategy.
The protocol couples a spot BTC position with a short position on perpetual futures exchanges to cancel out volatility.
USDh is live on Bitcoin L1 via Runes and will soon launch on Arch Network, unlocking greater liquidity and broader coverage within the Bitcoin ecosystem.
The protocol captures yield from funding rate payments earned by its short positions and distributes them to USDh stakers.
You stake USDh to receive sUSDh, a yield-bearing token offering up to 25% APY.
USDh yields averaged 18% over the past year.
@jakob_btc, CEO of @HermeticaFi, puts it simply:
"The ability to trade natively on Bitcoin with PSBTs, using Arch, is superior to anything on the market today. There's obviously a palpable excitement around everything that is happening with Arch."
That’s why Hermetica is building on @ArchNtwrk
Arch’s Layer 1.5 approach enables Hermetica to build bridgeless smart contracts on Bitcoin.
Using FROST + ROAST signature schemes and a Decentralized Verifier Network, Arch delivers trust-minimized execution without compromising base layer consensus.
The result is smart contracts running natively on Bitcoin.
Hermetica brings Bitcoin-backed stable liquidity powering DeFi on Bitcoin via Arch.
Together, we enable efficient arbitrage to support AMM DEXs, deliver faster, cheaper transactions, and preserve a native Bitcoin experience.
Hermetica is now translating its code to Rust in order to deploy USDh with Arch.
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