Decentralized finance (DeFi) protocol Umoja has released a product that lets in Coinbase wrapped BTC (cbBTC) token holders to produce a 6% yield on layer-2 network Terrible.
Umoja achieves its yield by tapping accurate into a unfold of centralized and decentralized exchange suggestions at the side of lined calls and arbitrage, which entails procuring an asset at on one venue and concurrently selling it for a elevated assign on one more venue.
Or no longer it’s worthing noting that cbBTC is a wrapped token and no longer bitcoin (BTC) itself, it’s an erc20 token backed 1:1 by bitcoin held at Coinbase.
The Umoja protocol supports a different of Yield Vault Tokens (YVTs) collateralized by cryptocurrencies (at the side of precise world asset tokens).
A form of YVTs is yBTC, which is minted once users deposit cbBTC on the protocol.
Acquiring a yield on BTC the employ of DeFi suggestions has been a controversial topic for bitcoin maximalists, who’re in total in opposition to the DeFi sector and altcoins.
Then again, as BTC continues its fall from above $100K to the April 7 low of $74.8K, investor query for achieving a yield to mitigate in opposition to pickle cost losses looks space to magnify.
Japanese company Metaplanet has honest no longer too lengthy prior to now started to produce a yield on bitcoin by purchasing pickle assets on the an identical time as build alternate choices, then selling top class on build alternate choices as assign slumps.
