Hermetica, the platform behind USDh, the first Bitcoin (BTC)-backed, yield-generating synthetic dollar, has just closed a $1.7 million seed funding round, as reported to Finbold on Wednesday, October 16.
The funding round was led by UTXO Management and saw participation from the likes of CMS Holdings, Ethos Fund, Trust Machines SPV, Newman Capital, and Silvermine.
High-profile angels included Tycho Onnasch (Zest Protocol), Robin Obermaier (Liquidium), Mithil Thakore (Velar), Matt Maduno (Arch Network), and GM Chung (DeSpread).
USDh expansion
The new funds will be used to drive the growth of USDh, issued natively on Bitcoin Layer-1 (L1) via Runes and Layer-2 (L2) through Stacks.
Available on decentralized exchanges (DEX), USDh taps into the flourishing stablecoin market, which has seen over 100% growth year-over-year, surpassing the $160-billion mark and making up half of all on-chain transactions.
Despite an impressive $1.3-trillion market cap, less than 1% of BTC is employed in decentralized finance (DeFi), leaving a $1 trillion market for USDh holders to explore.
By creating a stable, liquid dollar asset redeemable for BTC, Hermetica seeks to provide BTC holders with a way of holding dollars within the ecosystem securely.
Hermetica Labs CEO Jakob Schillinger described stablecoins as the foundation of DeFi systems, stating:
“We believe stablecoins are a foundational building block for a decentralized financial system. USDh is the ideal Bitcoin-backed stablecoin — capital efficient, independent of the fiat system, and yield-generating.”
Simon Shin, Managing Partner at Ethos Fund, added:
“We are excited about Hermetica because they are unlocking significant value within the Bitcoin ecosystem with the creation of USDh. We believe their ability to seamlessly integrate stablecoins into Bitcoin’s Layer 1 and Layer 2 networks presents a massive opportunity. USDh will become a fundamental tool for Bitcoin users seeking a reliable dollar asset without leaving the ecosystem.”
The future of USDh
The seed funding will help speed up USDh integration across the BTC ecosystem, leading to improved liquidity, institutional custodial partnerships, and scalable off-exchange settlement options.
In other words, Hermetica aims to offer a decentralized, secure alternative to fiat-backed stablecoins by leveraging Bitcoin’s core strengths.
The post Hermetica, the platform behind Bitcoin-backed USDh, raises $1.7m appeared first on Finbold.