Ren and UMA launch a Bitcoin-backed yield greenback

By | September 10, 2020

Trustless cross-chain bridge Ren and permissionless artificial asset platform UMA have teamed as much as launch a Bitcoin-backed yield greenback referred to as uUSD, along with a joint liquidity mining reward program.

The partnership will lead to a product that enables traders to leverage Bitcoin permissionlessly on the Ethereum community. The uUSD is UMA’s second yield greenback product following an Ethereum-backed yield greenback referred to as yUSD, launched in July 2020. The idea was extremely profitable with over 10 million yUSD minted over the previous two months.

A yield greenback is much like a stablecoin however with a number of important variations. It has an expiry date similar to a futures contract, and because it nears that date the worth will method $1. Upon expiry, will probably be redeemable for $1 of the collateral asset on the actual time of expiry. Uma describes it as representing “fixed-rate, fixed-term mortgage” since when they’re minted, yield {dollars} are often valued at lower than $1.

Customers will buy renBTC, a tokenized Bitcoin competitor to wBTC, and lock it as collateral with UMA as a way to mint uUSD tokens. These yield {dollars} can then be used to buy extra renBTC or for funding on different DeFi protocols.

Along with the brand new yield greenback can be a joint Ren and UMA liquidity farming incentive to leap begin collateral deposits. It should allow traders to earn UMA and Ren tokens for offering liquidity to the Balancer pool for uUSD which may be paired with USDC. The renBTC yield greenback incorporates a 125% collateralization ratio which matures on October 1st.

To incentivize yield farmers, the pool will obtain 10,000 UMA and 25,000 REN tokens per week, along with BAL tokens per the protocol’s calculations. The annual proportion price is just not fastened and can depend upon how a lot liquidity is offered over all the seven day interval.

The providing is optimistic information for the quickly rising wrapped Bitcoin market which permits yield farmers to place their BTC holdings to work on ERC-20 based mostly protocols. Over the previous three months the quantity of Bitcoin tokenized on the Ethereum community has surged 1350% and presently stands at slightly below 78,000 BTC based on Of that whole round 1 / 4, or 18,732, are renBTC.

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