Bitcoin-backed Hermetica secures $1.7m to expand stablecoin USDh

Hermetica, the company behind Bitcoin-backed stablecoin USDh, has raised $1.7 million in seed funding.

The fund will support the growth of USDh, a stablecoin designed to be backed by Bitcoin (BTC). A stablecoin is a type of cryptocurrency that aims to keep its value tied to a stable asset, such as the US dollar, rather than fluctuating like Bitcoin.

USDh allows Bitcoin holders to trade a digital asset pegged to the US dollar value without leaving the Bitcoin ecosystem. For example, 1 USDh equals 1 USD worth of Bitcoin.

According to the company’s press release, UTXO Management led the financing round, which also included several major investors such as CMS Holdings, Ethos Fund and Trust Machines SPV. Strategic supporters such as Tycho Onnasch of Zest Protocol and Robin Obermaier of Liquidium also contributed.

What is USD?

USDh is issued on Layer 1 and Layer 2 networks, Bitcoin’s main blockchain, allowing for faster and cheaper transactions. Stablecoin can be purchased on decentralized exchanges

Last month, Hermetica launched USDh on the Stacks Layer 2 network. This move offered users the potential to earn returns of up to 25%.

As the stablecoin market grows, USDh aims to capture a share of the estimated $1 trillion in untapped Bitcoin value that can be unlocked in DeFi. Its purpose is to enable Bitcoin market participants to hold dollars safely without leaving the Bitcoin ecosystem or switching to fiat money.