RenBTC and UMA are bringing yield farming to Bitcoin holders


Bitcoin fanatics might not want to attend for much longer for them to farm sky-high yields on the digital asset if an upcoming product launch goes as deliberate.

Permissionless artificial asset platform UMA and trustless cross-chain bridge Ren have partnered to launch a Bitcoin-backed yield greenback known as uUSD, as per an announcement. The collab can even see the beginning of a joint liquidity mining reward program that makes use of Bitcoin.

Yield farming your Bitcoin

For the uninitiated, yield farming sees stablecoin and Ethereum holders lock up their tokens on swimming pools like Uniswap, Curve, and Balancer, in flip receiving a portion of charges accrued from the merchants on these platforms. 

Holders of those pool tokens can, in flip, go lock up their tokens on newer merchandise, like Sushiswap, in flip receiving — or “farming” — tokens like Sushi. And thus far, the frenzy prompted some tokens to surge over 100,000% from preliminary costs and even attracted billions of {dollars} in locked liquidity.

But Bitcoin’s coming for that. As per particulars of the Uma-Ren partnership, the product would enable buyers to leverage their Bitcoin holdings on the Ethereum community. Doing so would supply a “uUSD” token. 

The product will likely be UMA’s second such yield greenback providing after the agency launched the Ethereum-backed yield greenback, the yUSD, in July 2020.

Here’s how yield {dollars} — that are just like stablecoins however have a key distinction — work: They have an expiry date, just like how futures contract commerce on exchanges and costs are engineered to strategy $1 nearer to that date. 

After expiry, holders can redeem their tokens for $1 price of the collateral asset on the actual time of expiry. And as they’re minted at lower than a greenback, holders stand to achieve a hard and fast quantity.

RenBTC and UMA swimming pools

To have interaction within the providing, customers should buy renBTC, a tokenized Bitcoin, and lock it as collateral with UMA as a way to mint uUSD tokens. The newly-minted tokens can then be used to buy extra renBTC, which may be pooled in flip, or for investments on different DeFi protocols that provide uUSD swimming pools.

In the beginning, to incentivize yield farmers, the brand new joint pool will obtain 10,000 UMA and 25,000 REN tokens per week. However, an annual share price — like the present 1,000 APYs on some SushiSwap swimming pools — just isn’t mounted and can rely upon how a lot liquidity is offered over the whole seven day interval.

The growth comes as the quantity of Bitcoin tokenized on the Ethereum community has surged 1350% since July, and presently stands at just under 78,000 BTC.

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